Criteria Non-federal entities other than states are required to follow the procurement standards set out at 2 CFR § 200.318 through § 200.326. They must use their own documented procurement procedures, which conform to applicable federal statutes and the procurement requirements identified in 2 CFR 200. Condition The Corporation’s written procurement standards do not comply with all of the procurement requirements set out at 2 CFR § 200.318 through § 200.326. Effect The Corporation is not in compliance with 2 CFR § 200.318 through § 200.326.
Finding Number: 2023-001 Repeat Finding: No Program Name/Title: Rural Health Outreach and Rural Network Development Program Federal Assistance Listing Number: 93.912 Federal Agency: U.S. Department of Health and Human Services Federal Award Number: N/A 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: The Organization did not maintain a written procurement policy, the Organization did not have adequate procurement policies in place to meet the minimum federal requirements for procurement standards. Cause: The Organizations did not meet all of the minimum federal requirements under Uniform Guidance. The Organization could not provide support to demonstrate that it performed all of the necessary procurement steps and did not have a written procurement policy. Effect: The Organization was not in compliance with federal regulations. Recommendation: The Organization should put in place a 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: Management agrees with the finding and will work to develop a procurement policy.
Finding Number: 2023-001 Repeat Finding: No Type of Finding: Significant Deficiency Description: 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: The Organization's policy did not meet all of the minimum federal requirements under Uniform Guidance. Cause: Historically the Organization has received few federal grants subject to the Uniform Guidance, and while the Organization maintained a written procurement policy, it did not meet certain requirements of the Guidance. Effect: The Organization was not in compliance with federal regulations. 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: Management are working on developing a policy.
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 Organization does not have a documented procurement policy that conforms to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Context: During the year, the Organization entered into contracts for services that was greater than the Simple Acquisition Threshold of $250,000. As part of the audit procedures, we requested the Organization’s documented procurement policy. The Organization did not have a documented procurement policy. Prior to entering agreements to making purchases in excess of the simplified acquisition threshold, the Organization performed a price analysis in a manner consistent with 2 CFR Part 200. Cause: The Organization was not aware that a documented procurement policy was required. Effect: Without documented procurement policies, the Organization could procure assets in a manner that is not consistent with 2 CFR Part 200. Recommendation: We recommend that the Organization familiarize themselves with the requirements of 2 CFR sections 200.318 through 200.326 and develop a documented procurement policy that conforms to applicable federal statutes and procurement requirements. Management’s Response: Management agrees.
Criteria: 2 CFR 200.303 requires nonfederal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that organizations who manage the federal award: • Understand and comply with the federal statutes, regulations, and terms and conditions of the award; • Evaluate and monitor compliance; • Take prompt action when instances of noncompliance is identified. 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). Additionally, the Uniform Guidance requires non-federal entities to develop written procedures related to the following areas: 1. Cash Management 2 CFR 200.302(b)(6) states that the financial management system of each non-Federal entity must provide for the written procedures to implement the requirements of 2 CFR 200.305 Federal Payment. 2. Allowability of Costs 2 CFR 200.302(b)(7) states that the financial management system of each non-Federal entity must provide for the Written procedures for determining the allowability of costs in accordance with Subpart E (Cost Principles) of this part and the terms and conditions of the Federal award. 3. Conflict of Interest 2 CFR 200.318(c)(1) states that the non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. The officers, employees, and agents of the non-Federal entity may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. However, non-Federal entities may set standards for situations in which the financial interest is not substantial, or the gift is an unsolicited item of nominal value. The standards of conduct must provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the non-Federal entity. In addition, the organizations should ensure that existing written procedures are in compliance with: a. Equipment Management Requirements 2 CFR 200.313(b) states that “A state must use, manage and dispose of equipment acquired under a Federal award by the state in accordance with state laws and procedures b. General Procurement Standards 2 CFR 200.317 to 200.326 discusses that contracts must be established and managed in accordance with the procurement requirements in 2 CFR Part 200. Grantees must have written procurement policies and procedures that demonstrate a fair and reliable process, with standards of conduct addressing conflicts of interest, for obtaining grant-funded goods and services. Condition The Foundation does not have documented policies and procedures concerning the following key compliances areas which are required by the Uniform Guidance: • Cash Management • Allowability of Cost • Conflict of Interest • Equipment and Real Property Management • Procurement, Suspension & Debarment Cause This is attributed to the insufficient resources or staffing to develop and formalize the policies and procedures. Effect The absence of formal policies and procedures in the key compliance areas could result in non-compliance with federal regulations, which may lead to unnecessary sanctions. Additionally, without formal written policies and procedures, it is difficult to ensure consistent practices across the organization. Questioned Costs None Recommendation The Foundation should develop and implement formal written policies and procedures for the specific areas required by the Uniform Guidance. These policies and procedures must clearly delineate the requirements of the Uniform Guidance. Personnel responsible for these areas should receive adequate training and apply the policies effectively. Regular reviews should be conducted to update the policies and procedures as needed. Views of Responsible Officials and Planned Corrective Action We understand how crucial it is to have strong policies and procedures in place. Here’s how we plan to move forward: 1. Review of Existing Policies and Procedures: We’re currently taking a close look at our existing policies and procedures to ensure they align with the Uniform Guidance. This will help us identify any gaps and make necessary updates so that we’re fully compliant. 2. Development of New Policies: Alongside this review, we will create clear and comprehensive written policies in key areas, such as: • Cash Management: Setting up procedures that comply with 2 CFR 200.305 to ensure timely payments. eCFR :: 2 CFR 200.305 -- Federal payment. • Allowability of Costs: Crafting guidelines that follow Subpart E—Cost Principles, so we can confidently determine which expenses are allowable. https://www.ecfr.gov/current/title-48/chapter-7/subchapter-E/part-731/subpart-731.7/section-731.770. • Conflict of Interest: Establishing standards of conduct that address potential conflicts and promote transparency. • Equipment and Real Property Management: Developing policies for managing equipment acquired under federal awards in line with 2 CFR 200.313(b). eCFR :: 2 CFR 200.313 -- Equipment. • Procurement Procedures: Creating clear procurement guidelines that align with 2 CFR 200.318 through 200.326 to ensure fairness and oversight. eCFR :: 2 CFR 200.318 -- General procurement standards. 3. Training and Communication: The Finance Department will be responsible for training all staff involved in managing federal awards. Training sessions will ensure that everyone understands the requirements and their roles in maintaining compliance. This training will be completed by December 31, 2024. Personnel responsible: Eduardo Cedeno, Director of Finance Anticipated completion date: December 31, 2024
Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow specific procurement standards set out in 2 CFR sections 200.318 through 200.326, which includes documenting the procurement methods used for vendor selection. These procedures are designed to ensure fair competition, cost-effectiveness, and federal requirements. These procurement standards require, among other provisions, that a non-federal entity must: 1. Meet the general procurement standards in 2 CFR Section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to reliable contractors, and maintaining records to document the history of procurement. 2. Conduct all procurement transactions for the acquisition of property or services under a federal award in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320. 3. Use documented procurement procedures, consistent with the standards of 2 CFR 200.317 to 320. 2 CFR 200.320 enumerates below the different procurement methods that a non-federal entity should use: a) The micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $50,000. b) Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. c) Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal 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) (1); 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)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” Condition During our audit, the Foundation was unable to provide supporting documentation to demonstrate that the required procurement methods under the Uniform Guidance were performed on three out of four vendors tested. The expenditures paid to these vendors ranged from $75,000 to $675,000 in 2023. Cause The lack of documentation is attributed to oversight in maintaining appropriate records of vendor selection and compliance with procurement standards. Effect The absence of procurement documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances or unnecessary sanctions. Questioned Costs None Recommendation The Foundation should strengthen its internal controls over procurement by ensuring that all procurement activities, particularly significant expenditures, are properly documented. This includes retaining evidence that procurement methods required by the Uniform Guidance were followed, such as bids, contracts, or justifications for sole-source vendors. The Foundation should also conduct training for staff involved in procurement to ensure awareness and adherence to the policies. Regular internal audits may be implemented to verify compliance with procurement procedures. Views of Responsible Officials and Planned Corrective Action We value your guidance and are committed to enhancing our compliance with the Uniform Guidance. In response, we will: 1. Documentation Procedures: We will implement procedures to properly document procurement activities. This will help us maintain consistency and ensure compliance with the Uniform Guidance. 2. Monitoring and Accountability: Additionally, we will establish a system to regularly monitor our compliance with these policies and procedures. This will enable us to quickly address any issues that may arise. The Finance Department will be responsible for implementing these changes and will have everything ready before the end of 2024. We are dedicated to making these improvements and truly value your support as we work through this process. Personnel responsible: Eduardo Cedeno, Director of Finance Anticipated completion date: December 31, 2024
Federal Program Coronavirus State and Local Fiscal Recovery Funds (21.027) Federal Award Number and Year – SLFRP2882, 2021 Procurement, Suspension, and Debarment Material Weakness Criteria Uniform Guidance requires all non-federal entities, other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. Non-federal entities are also prohibited from entering into a covered transaction equal to or exceeding $25,000 with a vendor who has been suspended or disbarred from receiving federal funds. Condition We noted during testing procurement, suspension, and debarment that the County doesn’t have a procurement policy that follows Uniform Guidance. We also noted during testing for suspension and debarment that 2 of our 2 vendors tested were not reviewed to ensure they were not suspended or disbarred from federal funds. Cause Lack of oversight by management. Questioned Costs None Context Uniform Guidance states “Review the non-federal entity’s procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.2096)”. During this review, we noted that during our testing of procurement, suspension, and debarment that the County doesn’t have a procurement policy that follows Uniform Guidance. We also noted during testing for suspension and debarment that 2 of our 2 vendors tested were not reviewed to ensure they were not suspended or disbarred from federal funds. Effect The County has an increased risk of not being compliance with federal procurement requirements and increased risk of entering into a covered transaction with a vendor who is suspended or disbarred from federal funds. Repeat Finding Yes – see 2022-005 Recommendation The County should update their Procurement Policy to include suspension and debarment verbiage. Views of Responsible Officials See Corrective Action Plan.
Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: Department of Health and Human Services Program Titles: Community Funded Projects Assistance Listing Number: 93.493 Pass-Through Entity: N/A Award Numbers: H79FG001026 Award Periods: September 30, 2023 through September 29, 2024 Criteria Internal controls requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance) , Subpart D ‐ Post Federal Award Requirements, Section 200.318 through 200.326 Internal Controls, require that a non‐Federal entity 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. The procurement procedures must include the following: - Using the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the nonfederal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). - For acquisitions exceeding the simplified acquisition threshold, using one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); 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 the circumstances are met, in accordance with 2 CFR section 200.320(c)). - Using Noncompetitive procurement only if one or more of the following circumstances apply: · The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; · The item is available only from a single source; · The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; · The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the nonfederal entity; or · After solicitation of a number of sources, competition is determined inadequate PDA’s procurement policy also requires a verification that vendors and sub-recipient are not suspended or debarred by checking the website of the System for Award Management and documentation of such verification maintained by the Finance Office. Condition/Context While PDA has established a procurement policy, it does not fully conform to Federal law and the Uniform Guidance for the following reasons: - Micro purchase threshold is not explicitly defined, although it is mentioned that cost and price analysis shall be made and documented in connection with every procurement action above $5,000. - The policy does not have clear provisions for maintaining detailed procurement records. Such records should include the rationale for the procurement method, the selection of contract type, the contractor selection or rejection process, and the basis for the contract price. - The simplified acquisition threshold is not defined and does not incorporate all relevant elements including sealed bids method. During our testing of 2 procurement transactions out of a total of 18, we observed that, despite management's detailed historical background on each of the selected transactions, the necessary documentation evidencing compliance with PDA’s procurement standards was not retained. All the transactions tested were noncompetitive and thus single sourced. The total misstatement is the entire population amount $208,580 as PDA did not maintain sufficient documentation to evidence history of procurement for all procurements and not just the 2 samples we tested. Furthermore, for these two vendors, which represented a 100% sample, we found no evidence of documentation for suspension and debarment verification. Although discussions with management suggested that all these transactions were properly conceived and evaluated at the time, supporting documentation was not retained. Cause PDA’s procurement policy does not seem to have been reviewed against the Uniform Guidance for compliance. Internal controls over maintaining sufficient records to detail the history of procurement including noncompetitive justification and suspension and debarment verification were found to be insufficient. Effect The absence of a policy that fully conformed to the Uniform Guidance resulted in noncompliance issues such as records sufficient to detail the history of procurement transactions not maintained. Questioned Costs $208,580 Repeat Finding Yes. Recommendation We recommend PDA implement measures to ensure that its procurement policy reflect applicable state and local laws and regulations conforming to applicable federal statutes and requirement in 2 CFR part 200. Management should ensure procurement transactions are documented in such detail to evidence the method of procurement use and vendor verification for suspension and debarment.
Criterial or Specific Requirement: Nonfederal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: The organization did not document procurements consistent with the standards of 2 CFR sections 200.318, 200.319, and 200.320. Cause: There are no formally approved written policies and procedures for procurement. Effect or Potential Effect: The cost of the procurements may be disallowed. Recommendation: The organization should become familiar with the procurement standards set out at 2 CFR sections 200.318 through 200.326 and establish written policies and procedures for procurement. Views of Responsible Officials: Management agrees with the finding and is in the process of finalizing written policies and procedures for procurement.
Criterial or Specific Requirement: Nonfederal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: The organization did not document procurements consistent with the standards of 2 CFR sections 200.318, 200.319, and 200.320. Cause: There are no formally approved written policies and procedures for procurement. Effect or Potential Effect: The cost of the procurements may be disallowed. Recommendation: The organization should become familiar with the procurement standards set out at 2 CFR sections 200.318 through 200.326 and establish written policies and procedures for procurement. Views of Responsible Officials: Management agrees with the finding and is in the process of finalizing written policies and procedures for procurement.
Criterial or Specific Requirement: Nonfederal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: The organization did not document procurements consistent with the standards of 2 CFR sections 200.318, 200.319, and 200.320. Cause: There are no formally approved written policies and procedures for procurement. Effect or Potential Effect: The cost of the procurements may be disallowed. Recommendation: The organization should become familiar with the procurement standards set out at 2 CFR sections 200.318 through 200.326 and establish written policies and procedures for procurement. Views of Responsible Officials: Management agrees with the finding and is in the process of finalizing written policies and procedures for procurement.
Management’s Response: The Home will update its purchasing policy to ensure the procurement standards in 2 CFR 200.317 – 200.326 are incorporated.
Environmental Protection Agency, passed through State of North Dakota Department of Environmental Quality Federal Financial Assistance Listing #66.468 Capitalization Grants for Drinking Water Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Criteria - Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition - During the course of our engagement, it was identified that the District did not have a written policy on procurement that satisfied the requirements of 2 CFR sections 200.318 through 200.326. Cause - Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with all of these requirements. Effect - A lack of documented policies increase the overall risk that employees are not aware of the specific requirements with of procurement, suspension, and debarment. Questioned Costs – None reported Context/Sampling - Overall procurement policy. Repeat Finding from Prior Year(s) – No Recommendation - We recommend that management establish a written policy that addresses all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.326 and maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. Views of Responsible Officials - There is no disagreement with the audit finding.
Item 2023-005 – Procurement Significant Deficiency Federal Program – COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number – 21.027 Pass-through Grantor's Numbers – 2159FR0256, 2159FR0212 Federal Award Year – December 31, 2023 Federal Agency – U.S. Department of Treasury Pass-Through Entity – Tulsa County/City of Tulsa Non-federal entities must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326, which stipulates that the organization must have a policy in place to comply with these standards. The Foundation had no documented policies in place over procurement of goods or services with the use of federal awards. As such, evidence was not available to document that federal procurement standards were followed as transactions took place. The Foundation and affiliates lacked a formally documented policy to prevent or detect inappropriate procurement from being entered into. The Foundation may improperly award and/or pay more than what could have been obtained for comparable goods or services for the geographic area. If instances of non-compliance with federal procurement have occurred or occur in the future, it could result in loss of grant funds, additional federal oversight of federal funding, or repayment of overspent federal monies could be requested to be paid by the Foundation. Not applicable. This is not a repeat finding. The Foundation should create a documented procurement policy that follows federal procurement policies and ensure that all affiliates establish and follow that policy. The Foundation and its affiliates should also establish formally documented controls to ensure that the procurement policies are being adhered. Management's response is reported in "Corrective Action Plan" at the end of this report.
Item 2023-005 – Procurement Significant Deficiency Federal Program – COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number – 21.027 Pass-through Grantor's Numbers – 2159FR0256, 2159FR0212 Federal Award Year – December 31, 2023 Federal Agency – U.S. Department of Treasury Pass-Through Entity – Tulsa County/City of Tulsa Non-federal entities must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326, which stipulates that the organization must have a policy in place to comply with these standards. The Foundation had no documented policies in place over procurement of goods or services with the use of federal awards. As such, evidence was not available to document that federal procurement standards were followed as transactions took place. The Foundation and affiliates lacked a formally documented policy to prevent or detect inappropriate procurement from being entered into. The Foundation may improperly award and/or pay more than what could have been obtained for comparable goods or services for the geographic area. If instances of non-compliance with federal procurement have occurred or occur in the future, it could result in loss of grant funds, additional federal oversight of federal funding, or repayment of overspent federal monies could be requested to be paid by the Foundation. Not applicable. This is not a repeat finding. The Foundation should create a documented procurement policy that follows federal procurement policies and ensure that all affiliates establish and follow that policy. The Foundation and its affiliates should also establish formally documented controls to ensure that the procurement policies are being adhered. Management's response is reported in "Corrective Action Plan" at the end of this report.
Item 2023-005 – Procurement Significant Deficiency Federal Program – COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number – 21.027 Pass-through Grantor's Numbers – 2159FR0256, 2159FR0212 Federal Award Year – December 31, 2023 Federal Agency – U.S. Department of Treasury Pass-Through Entity – Tulsa County/City of Tulsa Non-federal entities must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326, which stipulates that the organization must have a policy in place to comply with these standards. The Foundation had no documented policies in place over procurement of goods or services with the use of federal awards. As such, evidence was not available to document that federal procurement standards were followed as transactions took place. The Foundation and affiliates lacked a formally documented policy to prevent or detect inappropriate procurement from being entered into. The Foundation may improperly award and/or pay more than what could have been obtained for comparable goods or services for the geographic area. If instances of non-compliance with federal procurement have occurred or occur in the future, it could result in loss of grant funds, additional federal oversight of federal funding, or repayment of overspent federal monies could be requested to be paid by the Foundation. Not applicable. This is not a repeat finding. The Foundation should create a documented procurement policy that follows federal procurement policies and ensure that all affiliates establish and follow that policy. The Foundation and its affiliates should also establish formally documented controls to ensure that the procurement policies are being adhered. Management's response is reported in "Corrective Action Plan" at the end of this report.
Criteria or specific requirement: 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. This procurement process must be documented with proper supporting documentation. Condition: The County did not have proper procurement documentation available for the contracts tested in the audit. Questioned costs: None Context: Seven of the seven contracts tested did not have the proper supporting documentation to demonstrate that procurement procedures were followed in accordance with the County’s procurement policy. Cause: The contracts were in process before the funding was assigned to the projects and there was turnover at the County. Effect: Failure to document the procurement process exposes the County to the risk that the County’s procurement policy was not followed before the contracts were awarded. Repeat Finding: Yes, repeat of prior year finding 2022-003. Recommendation: CLA recommends the County follow their internal procurement policy procedures and keep documentation of such procedures to ensure compliance with the federal procurement requirements. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 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. This procurement process must be documented with proper supporting documentation. Condition: The County did not have proper procurement documentation available for the contracts tested in the audit. Questioned costs: None Context: Seven of the seven contracts tested did not have the proper supporting documentation to demonstrate that procurement procedures were followed in accordance with the County’s procurement policy. Cause: The contracts were in process before the funding was assigned to the projects and there was turnover at the County. Effect: Failure to document the procurement process exposes the County to the risk that the County’s procurement policy was not followed before the contracts were awarded. Repeat Finding: Yes, repeat of prior year finding 2022-003. Recommendation: CLA recommends the County follow their internal procurement policy procedures and keep documentation of such procedures to ensure compliance with the federal procurement requirements. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 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. This procurement process must be documented with proper supporting documentation. Condition: The County did not have proper procurement documentation available for the contracts tested in the audit. Questioned costs: None Context: Seven of the seven contracts tested did not have the proper supporting documentation to demonstrate that procurement procedures were followed in accordance with the County’s procurement policy. Cause: The contracts were in process before the funding was assigned to the projects and there was turnover at the County. Effect: Failure to document the procurement process exposes the County to the risk that the County’s procurement policy was not followed before the contracts were awarded. Repeat Finding: Yes, repeat of prior year finding 2022-003. Recommendation: CLA recommends the County follow their internal procurement policy procedures and keep documentation of such procedures to ensure compliance with the federal procurement requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-015 Procurement and Suspension and Debarment Assistance Listing No.: 14.267 Continuum of Care Program Condition: The Organization was unable to demonstrate consistent controls over the procurement requirement. Criteria: The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. The requirements that apply to procurement under cost-reimbursement contracts under the FAR are contained in 48 CFR parts 03, 15, 44 and the clauses at 48 CFR sections 52.244-2, 52.244-5, 52.203-13, 52.203- 16, and 52.215-12; agency FAR Supplements; and the terms and conditions of the contract. Questioned Costs There is no questioned cost. Cause: The Organization did not have sufficient controls to ensure that the procurement requirement was met due to staff turnover. Effect: The Organization could have expenditures that were paid that did not meet its own procurement policy. Perspective: Thirty-one of the forty items selected for testing did not have documentation of the control over compliance with the procurement and suspension and debartment requirement. Repeat Finding: This is a repeat finding. See finding 2022-018. Recommendation: In order to prevent future occurences of this deficiency, we recommend that management expand controls to ensure that they are able to demonstrate that all expenses meet their procurement policy. Auditee Response: The Organization agrees with the finding. See attached corrective action plan.
2023-015 Procurement and Suspension and Debarment Assistance Listing No.: 14.267 Continuum of Care Program Condition: The Organization was unable to demonstrate consistent controls over the procurement requirement. Criteria: The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. The requirements that apply to procurement under cost-reimbursement contracts under the FAR are contained in 48 CFR parts 03, 15, 44 and the clauses at 48 CFR sections 52.244-2, 52.244-5, 52.203-13, 52.203- 16, and 52.215-12; agency FAR Supplements; and the terms and conditions of the contract. Questioned Costs There is no questioned cost. Cause: The Organization did not have sufficient controls to ensure that the procurement requirement was met due to staff turnover. Effect: The Organization could have expenditures that were paid that did not meet its own procurement policy. Perspective: Thirty-one of the forty items selected for testing did not have documentation of the control over compliance with the procurement and suspension and debartment requirement. Repeat Finding: This is a repeat finding. See finding 2022-018. Recommendation: In order to prevent future occurences of this deficiency, we recommend that management expand controls to ensure that they are able to demonstrate that all expenses meet their procurement policy. Auditee Response: The Organization agrees with the finding. See attached corrective action plan.
2023-015 Procurement and Suspension and Debarment Assistance Listing No.: 14.267 Continuum of Care Program Condition: The Organization was unable to demonstrate consistent controls over the procurement requirement. Criteria: The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. The requirements that apply to procurement under cost-reimbursement contracts under the FAR are contained in 48 CFR parts 03, 15, 44 and the clauses at 48 CFR sections 52.244-2, 52.244-5, 52.203-13, 52.203- 16, and 52.215-12; agency FAR Supplements; and the terms and conditions of the contract. Questioned Costs There is no questioned cost. Cause: The Organization did not have sufficient controls to ensure that the procurement requirement was met due to staff turnover. Effect: The Organization could have expenditures that were paid that did not meet its own procurement policy. Perspective: Thirty-one of the forty items selected for testing did not have documentation of the control over compliance with the procurement and suspension and debartment requirement. Repeat Finding: This is a repeat finding. See finding 2022-018. Recommendation: In order to prevent future occurences of this deficiency, we recommend that management expand controls to ensure that they are able to demonstrate that all expenses meet their procurement policy. Auditee Response: The Organization agrees with the finding. See attached corrective action plan.
Federal Agency: U.S. Department of Transportation Federal Program Title: Formula Grants for Rural Area and Tribal Transit Program AL Number: 20.509 Federal Award Identification Number and Year: MN-2021-036-01 Pass-Through Agency: Minnesota Department of Transportation Pass-Through Number(s): 1051353 Award Period: 1/1/2023-12/31/2023 Type of Finding: • Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: 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. Non-federal entities should also follow any state procurement requirements as well. Condition: During our testing we noted the Organization did not apply any procurement procedures for five small purchases and one competitive proposal as they did not perform nor retain adequate documentation in accordance with Uniform Guidance and state requirements. Questioned costs: Unknown Context: Six out of the six procurement selections did not have any procurement procedures followed for a total of $722,948. Cause: Vendors in place had been procured in prior years, before current management assumed operations. Current management was unable to verify if the policies were followed. Effect: Potential effect of noncompliance with Uniform Guidance when procuring goods and services for expenditures over federal awards. Repeat finding: This is not a repeat finding. Recommendation: The Organization should review 2 CFR sections 200.318 through 200.326 requirements for procurement. The Organization should ensure documents are retained to support whether procurement policies were followed for vendors procured in years past. Views of responsible officials and planned corrective actions: There are no disagreements with the audit finding. The Organization will review the procurement standards as well as ensure documents are retained to support whether procurement policies were followed.
U.S. Department of Treasury passed through State of Utah Department of Workforce Services and through Colorado Department of Human Services 2023-002 Procurement and Suspension and Debarment Program Name of Federal Program (Assistance Listing Number): Coronavirus State and Local Fiscal Recovery Funds (21.027) Criteria - Recipients of federal awards must follow the procurement standards set out at 2 CFR section 200.317 through 200.326. They must use their own documented procurement procedures, which reflect applicable State laws and regulations, provided that the procedures conform to applicable Federal law and the procurement requirements identified in 2 CFR part 200. Recipients “must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price” 2 CFR section 200.318(i). Context and Condition - We selected five contracts to test for compliance with procurement standards. Records for one contract lacked documentation sufficient to detail procurement history. Cause - The Academy did not follow its procurement policy for publicly soliciting bids. Effect - A potential failure to conduct procurement transactions in a manner providing full and open competition exists. Questioned Costs - No costs were questioned. Recommendation - We recommend the Academy ensure it 1) maintains documentation of the history of procurement and 2) monitors compliance with documentation requirements. Views of responsible officials - The Academy will review its procurement policies and internal controls and ensure timely action is taken when noncompliance is identified.
Assistance Listing Number(s): 10.912 Name of Federal Program or Cluster: Environmental Quality Incentives Program Name of Federal Agency: Department of Agriculture Award Periods: September 3, 2019 through July 31, 2024 and September 30, 2020 through September 30, 2025 Assistance Listing Number(s): 10.924 Name of Federal Program or Cluster: Conservation Stewardship Program Name of Federal Agency: Department of Agriculture Award Periods: September 3, 2019 through July 31, 2024 and September 30, 2020 through September 30, 2025 Criteria or Specific Requirement: Subparts D and E of 2 CFR Part 200 require a nonfederal entity to establish written policies, procedures, and standards of conduct, including procedures to implement the cash management requirements of 2 CFR section 200.305, procedures that comply with the procurement standards of 2 CFR sections 200.318 through 200.326, and procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR Part 200. Specifically, 2 CFR sections 200.430, 200.431, and 200.475 require written policies. Condition: There are no written policies and procedures for allowable costs/cost principles, cash management, procurement and suspension and debarment requirements. Cause: The Organization does not have a process for reviewing their accounting policies and procedures manual on a regular basis to ensure written procedures conform to Uniform Guidance requirements. Effect or Potential Effect: A lack of written policies, procedures, and standards of conduct may result in noncompliance with the requirements of federal programs and/or disallowed costs. Repeat Finding: No Recommendation: We recommend the Organization’s written policies and procedures be reviewed and updated for compliance with Uniform Guidance. The organization should become familiar with the requirements of Subparts D and E of 2 CFR Part 200 and establish appropriate written policies, procedures, and standards of conduct. Views of Responsible Officials: Management agrees with the finding and they will evaluate our findings to determine an appropriate corrective action.
Assistance Listing Number(s): 10.912 Name of Federal Program or Cluster: Environmental Quality Incentives Program Name of Federal Agency: Department of Agriculture Award Periods: September 3, 2019 through July 31, 2024 and September 30, 2020 through September 30, 2025 Assistance Listing Number(s): 10.924 Name of Federal Program or Cluster: Conservation Stewardship Program Name of Federal Agency: Department of Agriculture Award Periods: September 3, 2019 through July 31, 2024 and September 30, 2020 through September 30, 2025 Criteria or Specific Requirement: Subparts D and E of 2 CFR Part 200 require a nonfederal entity to establish written policies, procedures, and standards of conduct, including procedures to implement the cash management requirements of 2 CFR section 200.305, procedures that comply with the procurement standards of 2 CFR sections 200.318 through 200.326, and procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR Part 200. Specifically, 2 CFR sections 200.430, 200.431, and 200.475 require written policies. Condition: There are no written policies and procedures for allowable costs/cost principles, cash management, procurement and suspension and debarment requirements. Cause: The Organization does not have a process for reviewing their accounting policies and procedures manual on a regular basis to ensure written procedures conform to Uniform Guidance requirements. Effect or Potential Effect: A lack of written policies, procedures, and standards of conduct may result in noncompliance with the requirements of federal programs and/or disallowed costs. Repeat Finding: No Recommendation: We recommend the Organization’s written policies and procedures be reviewed and updated for compliance with Uniform Guidance. The organization should become familiar with the requirements of Subparts D and E of 2 CFR Part 200 and establish appropriate written policies, procedures, and standards of conduct. Views of Responsible Officials: Management agrees with the finding and they will evaluate our findings to determine an appropriate corrective action.
2023-001 – Procurement and Suspension and Debarment Finding Type: Material Noncompliance; Material Weakness in Internal Control over Compliance Program: Rural Communities Opioid Response – Planning/Rural Health Outreach and Rural Network Development Program (AL# 93.912); U.S. Department of Health and Human Services; Direct award; all grant numbers. Criteria: Non-federal entities 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 Organization's procurement policies were not complete and the Organization did not follow the federal procurement standards which provides specific guidance including process and documentation requirements necessary to be in compliance as required by the 2 CFR sections 200.318 through 200.326. Cause: The Organization’s procurement policies do not include the federal procurement requirements noted at 2 CFR section 200.318 through 200.326. Additionally, the Organization did not maintain the required procurement documentation, provide for full and open competition, or provide support for limitation of such competition. Effect: Future procurement arrangements may not meet the federal guidelines necessary for projects funded by federal sources. The Organization may have to pay back funds received for a project where federal funds were used for the procurement of products or services, but the required federal process was not met. Recommendation: The Organization should update their procurement policy to include all requirements as noted in 2 CFR sections 200.318-200.326 and ensure that all future agreements follow the required processes. View of Responsible Officials: Management agrees with the finding and plans to update their procurement policy. Repeat Finding - 2022-001
2023-001 – Procurement and Suspension and Debarment Finding Type: Material Noncompliance; Material Weakness in Internal Control over Compliance Program: Rural Communities Opioid Response – Planning/Rural Health Outreach and Rural Network Development Program (AL# 93.912); U.S. Department of Health and Human Services; Direct award; all grant numbers. Criteria: Non-federal entities 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 Organization's procurement policies were not complete and the Organization did not follow the federal procurement standards which provides specific guidance including process and documentation requirements necessary to be in compliance as required by the 2 CFR sections 200.318 through 200.326. Cause: The Organization’s procurement policies do not include the federal procurement requirements noted at 2 CFR section 200.318 through 200.326. Additionally, the Organization did not maintain the required procurement documentation, provide for full and open competition, or provide support for limitation of such competition. Effect: Future procurement arrangements may not meet the federal guidelines necessary for projects funded by federal sources. The Organization may have to pay back funds received for a project where federal funds were used for the procurement of products or services, but the required federal process was not met. Recommendation: The Organization should update their procurement policy to include all requirements as noted in 2 CFR sections 200.318-200.326 and ensure that all future agreements follow the required processes. View of Responsible Officials: Management agrees with the finding and plans to update their procurement policy. Repeat Finding - 2022-001
2023-001 – Procurement and Suspension and Debarment Finding Type: Material Noncompliance; Material Weakness in Internal Control over Compliance Program: Rural Communities Opioid Response – Planning/Rural Health Outreach and Rural Network Development Program (AL# 93.912); U.S. Department of Health and Human Services; Direct award; all grant numbers. Criteria: Non-federal entities 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 Organization's procurement policies were not complete and the Organization did not follow the federal procurement standards which provides specific guidance including process and documentation requirements necessary to be in compliance as required by the 2 CFR sections 200.318 through 200.326. Cause: The Organization’s procurement policies do not include the federal procurement requirements noted at 2 CFR section 200.318 through 200.326. Additionally, the Organization did not maintain the required procurement documentation, provide for full and open competition, or provide support for limitation of such competition. Effect: Future procurement arrangements may not meet the federal guidelines necessary for projects funded by federal sources. The Organization may have to pay back funds received for a project where federal funds were used for the procurement of products or services, but the required federal process was not met. Recommendation: The Organization should update their procurement policy to include all requirements as noted in 2 CFR sections 200.318-200.326 and ensure that all future agreements follow the required processes. View of Responsible Officials: Management agrees with the finding and plans to update their procurement policy. Repeat Finding - 2022-001
2023-001 – Procurement and Suspension and Debarment Finding Type: Material Noncompliance; Material Weakness in Internal Control over Compliance Program: Rural Communities Opioid Response – Planning/Rural Health Outreach and Rural Network Development Program (AL# 93.912); U.S. Department of Health and Human Services; Direct award; all grant numbers. Criteria: Non-federal entities 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 Organization's procurement policies were not complete and the Organization did not follow the federal procurement standards which provides specific guidance including process and documentation requirements necessary to be in compliance as required by the 2 CFR sections 200.318 through 200.326. Cause: The Organization’s procurement policies do not include the federal procurement requirements noted at 2 CFR section 200.318 through 200.326. Additionally, the Organization did not maintain the required procurement documentation, provide for full and open competition, or provide support for limitation of such competition. Effect: Future procurement arrangements may not meet the federal guidelines necessary for projects funded by federal sources. The Organization may have to pay back funds received for a project where federal funds were used for the procurement of products or services, but the required federal process was not met. Recommendation: The Organization should update their procurement policy to include all requirements as noted in 2 CFR sections 200.318-200.326 and ensure that all future agreements follow the required processes. View of Responsible Officials: Management agrees with the finding and plans to update their procurement policy. Repeat Finding - 2022-001
2023-001 – Procurement and Suspension and Debarment Finding Type: Material Noncompliance; Material Weakness in Internal Control over Compliance Program: Rural Communities Opioid Response – Planning/Rural Health Outreach and Rural Network Development Program (AL# 93.912); U.S. Department of Health and Human Services; Direct award; all grant numbers. Criteria: Non-federal entities 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 Organization's procurement policies were not complete and the Organization did not follow the federal procurement standards which provides specific guidance including process and documentation requirements necessary to be in compliance as required by the 2 CFR sections 200.318 through 200.326. Cause: The Organization’s procurement policies do not include the federal procurement requirements noted at 2 CFR section 200.318 through 200.326. Additionally, the Organization did not maintain the required procurement documentation, provide for full and open competition, or provide support for limitation of such competition. Effect: Future procurement arrangements may not meet the federal guidelines necessary for projects funded by federal sources. The Organization may have to pay back funds received for a project where federal funds were used for the procurement of products or services, but the required federal process was not met. Recommendation: The Organization should update their procurement policy to include all requirements as noted in 2 CFR sections 200.318-200.326 and ensure that all future agreements follow the required processes. View of Responsible Officials: Management agrees with the finding and plans to update their procurement policy. Repeat Finding - 2022-001
Finding: 2023-001 Program Title: Congressionally Funded Community Projects Assistance Listing: 84.215K Contract Grant Number: S215K230172 Federal Award Years: July 1, 2023 to May 31, 2025 Federal Agency: U.S. Department of Education Type of Finding: Material Noncompliance Criteria: 2 CFR sections 200.318 through 200.326 establishes the procurement standards applicable to Non- Federal Entities applicable to federal awards. When acquisitions exceed the simplified acquisition threshold of $250,000, the non-federal entity must use one of the following procurement methods: the sealed bid method, the competitive proposals method, or the noncompetitive proposals method based on the criteria outlined in 2 CFR section 200.320. Condition: Based on procedures performed, SC&C identified acquisitions in excess of the simplified acquisition threshold that were not selected using an appropriate procurement method. Cause: The Organization was unaware of the compliance requirement. Also, the Organization did not follow its written procurement policy. Effect: $324,000 of costs are questioned costs as a result of failing to meet procurement requirements. This is considered material to the Congressionally Funded Community Projects. Repeat Finding: No Recommendation: We recommend the Organization establish and implement written policies and procedures to establish to ensure compliance with the compliance requirements and terms and conditions of the federal award. Views of Responsible Officials: Management agrees with the recommendations to establish and implement written policies and procedures to conform with the compliance requirements and terms and conditions of the federal award.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Assistance Listing Number: 20.205 Federal Award Identification Number and Year: 693JJ22330000Y300MN1921048 Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific 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. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. Questioned costs: None Context: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. It was being completed by a third party vendor, but the county did not receive documentation verifying it was being completed. Cause: The County did not request or retain the documentation of this requirement being met. Effect: It is possible that the County could be out of compliance with prevailing wage rate requirements. Repeat finding: No Recommendation: We recommend the County implement a internal controls to verify they are compliant with prevailing wage requirements when a consultant is used. Views of responsible officials: There is no disagreement with the finding.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Assistance Listing Number: 20.205 Federal Award Identification Number and Year: 693JJ22330000Y300MN1921048 Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific 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. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. Questioned costs: None Context: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. It was being completed by a third party vendor, but the county did not receive documentation verifying it was being completed. Cause: The County did not request or retain the documentation of this requirement being met. Effect: It is possible that the County could be out of compliance with prevailing wage rate requirements. Repeat finding: No Recommendation: We recommend the County implement a internal controls to verify they are compliant with prevailing wage requirements when a consultant is used. Views of responsible officials: There is no disagreement with the finding.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Assistance Listing Number: 20.205 Federal Award Identification Number and Year: 693JJ22330000Y300MN1921048 Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific 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. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. Questioned costs: None Context: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. It was being completed by a third party vendor, but the county did not receive documentation verifying it was being completed. Cause: The County did not request or retain the documentation of this requirement being met. Effect: It is possible that the County could be out of compliance with prevailing wage rate requirements. Repeat finding: No Recommendation: We recommend the County implement a internal controls to verify they are compliant with prevailing wage requirements when a consultant is used. Views of responsible officials: There is no disagreement with the finding.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Assistance Listing Number: 20.205 Federal Award Identification Number and Year: 693JJ22330000Y300MN1921048 Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific 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. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. Questioned costs: None Context: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. It was being completed by a third party vendor, but the county did not receive documentation verifying it was being completed. Cause: The County did not request or retain the documentation of this requirement being met. Effect: It is possible that the County could be out of compliance with prevailing wage rate requirements. Repeat finding: No Recommendation: We recommend the County implement a internal controls to verify they are compliant with prevailing wage requirements when a consultant is used. Views of responsible officials: There is no disagreement with the finding.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Assistance Listing Number: 20.205 Federal Award Identification Number and Year: 693JJ22330000Y300MN1921048 Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific 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. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. Questioned costs: None Context: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. It was being completed by a third party vendor, but the county did not receive documentation verifying it was being completed. Cause: The County did not request or retain the documentation of this requirement being met. Effect: It is possible that the County could be out of compliance with prevailing wage rate requirements. Repeat finding: No Recommendation: We recommend the County implement a internal controls to verify they are compliant with prevailing wage requirements when a consultant is used. Views of responsible officials: There is no disagreement with the finding.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Assistance Listing Number: 20.205 Federal Award Identification Number and Year: 693JJ22330000Y300MN1921048 Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific 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. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. Questioned costs: None Context: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. It was being completed by a third party vendor, but the county did not receive documentation verifying it was being completed. Cause: The County did not request or retain the documentation of this requirement being met. Effect: It is possible that the County could be out of compliance with prevailing wage rate requirements. Repeat finding: No Recommendation: We recommend the County implement a internal controls to verify they are compliant with prevailing wage requirements when a consultant is used. Views of responsible officials: There is no disagreement with the finding.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Assistance Listing Number: 20.205 Federal Award Identification Number and Year: 693JJ22330000Y300MN1921048 Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific 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. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. Questioned costs: None Context: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. It was being completed by a third party vendor, but the county did not receive documentation verifying it was being completed. Cause: The County did not request or retain the documentation of this requirement being met. Effect: It is possible that the County could be out of compliance with prevailing wage rate requirements. Repeat finding: No Recommendation: We recommend the County implement a internal controls to verify they are compliant with prevailing wage requirements when a consultant is used. Views of responsible officials: There is no disagreement with the finding.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Assistance Listing Number: 20.205 Federal Award Identification Number and Year: 693JJ22330000Y300MN1921048 Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific 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. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. Questioned costs: None Context: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. It was being completed by a third party vendor, but the county did not receive documentation verifying it was being completed. Cause: The County did not request or retain the documentation of this requirement being met. Effect: It is possible that the County could be out of compliance with prevailing wage rate requirements. Repeat finding: No Recommendation: We recommend the County implement a internal controls to verify they are compliant with prevailing wage requirements when a consultant is used. Views of responsible officials: There is no disagreement with the finding.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Assistance Listing Number: 20.205 Federal Award Identification Number and Year: 693JJ22330000Y300MN1921048 Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific 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. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. Questioned costs: None Context: During our testing it was noted that, for 1 of the 5 the contracts tested County did not receive or verify the contract was in compliance with prevailing wage compliance requirements. It was being completed by a third party vendor, but the county did not receive documentation verifying it was being completed. Cause: The County did not request or retain the documentation of this requirement being met. Effect: It is possible that the County could be out of compliance with prevailing wage rate requirements. Repeat finding: No Recommendation: We recommend the County implement a internal controls to verify they are compliant with prevailing wage requirements when a consultant is used. Views of responsible officials: There is no disagreement with the finding.
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.