U.S DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U PASS THROUGH NUMBER 4401 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-002 Equipment and Real Property Management / Special Tests and Provisions Criteria or specific requirement (including statutory, regulatory, or other citation): 29 CFR 5.5 (Wage Rate Requirements) requires all contractors and subcontractors performing construction contracts in excess of $2,000, financed by federal assistance funds, to pay laborers and mechanics employed by the contractor or subcontractor not less than the prevailing wage rates established by the Department of Labor for the locality of the project. Non-federal entities shall include in the applicable construction contracts a provision that the contractor or subcontractor comply with those requirements. Such requirements include the submission of weekly certified payrolls for each week in which any contract work is performed, to the non-federal entities. Additionally, 2 CFR 200.326 and Ark. Code Ann. § 18-44-503 require a non-federal entity to obtain a performance bond for the public construction contract. Condition: The District paid $1,064,887 for installation of an HVAC system from the Education Stabilization Fund without obtaining a written contract that included the prevailing wage rate provision, and weekly certified payrolls were not submitted to the District. Additionally, the District did not obtain a performance bond from the contractor, as required by Ark. Code Ann. § 18-44-503. Cause: Lack of internal controls and management oversight. Effect: The District did not comply with Wage Rate Requirements or Bonding Requirements. Context: A total of two payments/contracts for facility repairs and improvements were paid from the Education Stabilization Fund. Both were examined. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District supplied the bidding groups with all the federal guidelines and requirements. However, we did not request or receive documentation regarding the adherence to those requirements. The District will contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding the matter and implement proper controls over program expenditures.
Federal Program Information: Funding Agency: U.S. Department of Interior Title: Rangeland Resource Management FAL Number: 15.237 Passthrough: L20AC00454-1-L21AC10556 (2) Award Year: 2023 Criteria: §200.213 Suspension and debarment. Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, sub awards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. §200.317 Procurements by states. When procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. The state will comply with §200.322 Procurement of recovered materials and ensure that every purchase order or other contract includes any clauses required by section §200.326 Contract provisions. All other non-Federal entities, including sub recipients of a state, will follow §§200.318 General procurement standards through 200.326 Contract provisions. §200.318 General procurement standards. (a) The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. (b) Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. APPENDIX II TO PART 200—CONTRACT PROVISIONS FOR NON-FEDERAL ENTITY CONTRACTS UNDER FEDERAL AWARDS In addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. (H) Debarment and Suspension (Executive Orders 12549 and 12689)—A contract award (see 2 CFR 180.220) must not be made to parties listed on the government-wide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp., p. 189) and 12689 (3 CFR part 1989 Comp., p. 235), “Debarment and Suspension.” https://www.sam.gov/portal/public/SAM/ SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549. Questioned Costs: None Condition: During our testing of single audit disbursements, we identified two vendors which would meet the requirement of verifying that the vendor was not suspended or debarred or otherwise excluded from receiving the contract, which was funded through Federal dollars. The vendors received more than $25,000 in payments from the District from Federal grant sources. The vendors are not currently suspended or debarred from receiving Federal contracts; however, the District did not have proper internal controls in place to verify this prior to the payment. Cause: District personnel were unaware of the requirement to ensure vendors receiving more than $25,000 were not on the suspension and debarment listing. Effect: The District is not in compliance with Federal regulations related to the grant and could put funding in jeopardy or require the District to reimburse the program for improper grant distributions. Auditor’s Recommendation: We recommend the District establish a policy and implement procedures regarding large purchases related to Federal grants to insure that no vendors who are suspended, debarred, or otherwise excluded from participating in transactions funded through Federal grants are used. As identified above, there are several methods in which the District can verify vendors are not suspended or debarred. The District may have the vendor provide an annual certification that it is not currently suspended, debarred, or otherwise prevented from receiving Federal dollars. In other occasions in which a single purchase is going to be made, the purchasing procedures should include looking up the vendor on the GSA website, printing a copy of the verification, and placing it in the file with the purchase order. The District has options, and it should establish what method is the least intrusive, but also effective, in complying with the requirements of the Uniform Grant Guidance. Responsible Official’s Plan: Specific corrective action plan for finding: The procurement Officer of SJSWCD has updated the procurement process on 12/7/2023 that all contractors who will be receiving Federal monies must provide an annual certification that they are not suspended, debarred, inactive, or otherwise excluded from participating in transactions funded through Federal grants. The policy change will be approved at the next board meeting. Timeline for completion of corrective action plan: December 7, 2023 Employee position(s) responsible for meeting the timeline: District Manager/Procurement Officer
FINDING 2023-003 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027; 84.173; 84.027X; 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 19611-058-PN01, 21611-058-PN01, 22611-058-PN01, 22611-056-ARP, 20619-056-PN01, 21619-056-PN01, 22619-056-PN01, 22619-056-ARP, 23611-056-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-002. Condition and Context Procurement - Policy The School Corporation had adopted a purchasing policy; however, the policy did not conform to the procurement standards outlined in 2 CFR 200.318 through 2 CFR 200.326. The policy did not reflect applicable state laws and regulations, avoid acquisition of unnecessary or duplicative items, ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service being procured, and ensure that all solicitations identify all requirements which the offerors must fulfill and other factors to be used in evaluating bids or proposals. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. If it is determined a single source provider can be used for a small purchase, documentation must be retained supporting the determination. There were forty-seven vendors identified that fell within the small purchases threshold. Eight of the vendors were selected for testing. For eight of eight vendors tested that fell within the small purchases threshold, the School Corporation did not obtain an adequate number of price or rate quotations to ensure the procurements provided full and open competition. In addition, history of the procurements which would include the rationale for the method of procurement, selection of the vendor, and basis for price was not documented. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Upon inquiry of the School Corporation, it was determined there was a process in place to verify that vendors were not suspended or debarred, or otherwise excluded or disqualified from participation in the federal award, prior to entering into a covered transaction. One employee was responsible for checking SAM exclusions by running a vendor exclusion list and comparing that list to a vendor history report from the School Corporation's financial software. However, there was no documented oversight, review, or approval process to ensure the process was completed and accurate. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027; 84.173; 84.027X; 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 19611-058-PN01, 21611-058-PN01, 22611-058-PN01, 22611-056-ARP, 20619-056-PN01, 21619-056-PN01, 22619-056-PN01, 22619-056-ARP, 23611-056-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-002. Condition and Context Procurement - Policy The School Corporation had adopted a purchasing policy; however, the policy did not conform to the procurement standards outlined in 2 CFR 200.318 through 2 CFR 200.326. The policy did not reflect applicable state laws and regulations, avoid acquisition of unnecessary or duplicative items, ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service being procured, and ensure that all solicitations identify all requirements which the offerors must fulfill and other factors to be used in evaluating bids or proposals. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. If it is determined a single source provider can be used for a small purchase, documentation must be retained supporting the determination. There were forty-seven vendors identified that fell within the small purchases threshold. Eight of the vendors were selected for testing. For eight of eight vendors tested that fell within the small purchases threshold, the School Corporation did not obtain an adequate number of price or rate quotations to ensure the procurements provided full and open competition. In addition, history of the procurements which would include the rationale for the method of procurement, selection of the vendor, and basis for price was not documented. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Upon inquiry of the School Corporation, it was determined there was a process in place to verify that vendors were not suspended or debarred, or otherwise excluded or disqualified from participation in the federal award, prior to entering into a covered transaction. One employee was responsible for checking SAM exclusions by running a vendor exclusion list and comparing that list to a vendor history report from the School Corporation's financial software. However, there was no documented oversight, review, or approval process to ensure the process was completed and accurate. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027; 84.173; 84.027X; 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 19611-058-PN01, 21611-058-PN01, 22611-058-PN01, 22611-056-ARP, 20619-056-PN01, 21619-056-PN01, 22619-056-PN01, 22619-056-ARP, 23611-056-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-002. Condition and Context Procurement - Policy The School Corporation had adopted a purchasing policy; however, the policy did not conform to the procurement standards outlined in 2 CFR 200.318 through 2 CFR 200.326. The policy did not reflect applicable state laws and regulations, avoid acquisition of unnecessary or duplicative items, ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service being procured, and ensure that all solicitations identify all requirements which the offerors must fulfill and other factors to be used in evaluating bids or proposals. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. If it is determined a single source provider can be used for a small purchase, documentation must be retained supporting the determination. There were forty-seven vendors identified that fell within the small purchases threshold. Eight of the vendors were selected for testing. For eight of eight vendors tested that fell within the small purchases threshold, the School Corporation did not obtain an adequate number of price or rate quotations to ensure the procurements provided full and open competition. In addition, history of the procurements which would include the rationale for the method of procurement, selection of the vendor, and basis for price was not documented. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Upon inquiry of the School Corporation, it was determined there was a process in place to verify that vendors were not suspended or debarred, or otherwise excluded or disqualified from participation in the federal award, prior to entering into a covered transaction. One employee was responsible for checking SAM exclusions by running a vendor exclusion list and comparing that list to a vendor history report from the School Corporation's financial software. However, there was no documented oversight, review, or approval process to ensure the process was completed and accurate. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027; 84.173; 84.027X; 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 19611-058-PN01, 21611-058-PN01, 22611-058-PN01, 22611-056-ARP, 20619-056-PN01, 21619-056-PN01, 22619-056-PN01, 22619-056-ARP, 23611-056-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-002. Condition and Context Procurement - Policy The School Corporation had adopted a purchasing policy; however, the policy did not conform to the procurement standards outlined in 2 CFR 200.318 through 2 CFR 200.326. The policy did not reflect applicable state laws and regulations, avoid acquisition of unnecessary or duplicative items, ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service being procured, and ensure that all solicitations identify all requirements which the offerors must fulfill and other factors to be used in evaluating bids or proposals. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. If it is determined a single source provider can be used for a small purchase, documentation must be retained supporting the determination. There were forty-seven vendors identified that fell within the small purchases threshold. Eight of the vendors were selected for testing. For eight of eight vendors tested that fell within the small purchases threshold, the School Corporation did not obtain an adequate number of price or rate quotations to ensure the procurements provided full and open competition. In addition, history of the procurements which would include the rationale for the method of procurement, selection of the vendor, and basis for price was not documented. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Upon inquiry of the School Corporation, it was determined there was a process in place to verify that vendors were not suspended or debarred, or otherwise excluded or disqualified from participation in the federal award, prior to entering into a covered transaction. One employee was responsible for checking SAM exclusions by running a vendor exclusion list and comparing that list to a vendor history report from the School Corporation's financial software. However, there was no documented oversight, review, or approval process to ensure the process was completed and accurate. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027; 84.173; 84.027X; 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 19611-058-PN01, 21611-058-PN01, 22611-058-PN01, 22611-056-ARP, 20619-056-PN01, 21619-056-PN01, 22619-056-PN01, 22619-056-ARP, 23611-056-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-002. Condition and Context Procurement - Policy The School Corporation had adopted a purchasing policy; however, the policy did not conform to the procurement standards outlined in 2 CFR 200.318 through 2 CFR 200.326. The policy did not reflect applicable state laws and regulations, avoid acquisition of unnecessary or duplicative items, ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service being procured, and ensure that all solicitations identify all requirements which the offerors must fulfill and other factors to be used in evaluating bids or proposals. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. If it is determined a single source provider can be used for a small purchase, documentation must be retained supporting the determination. There were forty-seven vendors identified that fell within the small purchases threshold. Eight of the vendors were selected for testing. For eight of eight vendors tested that fell within the small purchases threshold, the School Corporation did not obtain an adequate number of price or rate quotations to ensure the procurements provided full and open competition. In addition, history of the procurements which would include the rationale for the method of procurement, selection of the vendor, and basis for price was not documented. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Upon inquiry of the School Corporation, it was determined there was a process in place to verify that vendors were not suspended or debarred, or otherwise excluded or disqualified from participation in the federal award, prior to entering into a covered transaction. One employee was responsible for checking SAM exclusions by running a vendor exclusion list and comparing that list to a vendor history report from the School Corporation's financial software. However, there was no documented oversight, review, or approval process to ensure the process was completed and accurate. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027; 84.173; 84.027X; 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 19611-058-PN01, 21611-058-PN01, 22611-058-PN01, 22611-056-ARP, 20619-056-PN01, 21619-056-PN01, 22619-056-PN01, 22619-056-ARP, 23611-056-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-002. Condition and Context Procurement - Policy The School Corporation had adopted a purchasing policy; however, the policy did not conform to the procurement standards outlined in 2 CFR 200.318 through 2 CFR 200.326. The policy did not reflect applicable state laws and regulations, avoid acquisition of unnecessary or duplicative items, ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service being procured, and ensure that all solicitations identify all requirements which the offerors must fulfill and other factors to be used in evaluating bids or proposals. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. If it is determined a single source provider can be used for a small purchase, documentation must be retained supporting the determination. There were forty-seven vendors identified that fell within the small purchases threshold. Eight of the vendors were selected for testing. For eight of eight vendors tested that fell within the small purchases threshold, the School Corporation did not obtain an adequate number of price or rate quotations to ensure the procurements provided full and open competition. In addition, history of the procurements which would include the rationale for the method of procurement, selection of the vendor, and basis for price was not documented. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Upon inquiry of the School Corporation, it was determined there was a process in place to verify that vendors were not suspended or debarred, or otherwise excluded or disqualified from participation in the federal award, prior to entering into a covered transaction. One employee was responsible for checking SAM exclusions by running a vendor exclusion list and comparing that list to a vendor history report from the School Corporation's financial software. However, there was no documented oversight, review, or approval process to ensure the process was completed and accurate. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027; 84.173; 84.027X; 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 19611-058-PN01, 21611-058-PN01, 22611-058-PN01, 22611-056-ARP, 20619-056-PN01, 21619-056-PN01, 22619-056-PN01, 22619-056-ARP, 23611-056-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-002. Condition and Context Procurement - Policy The School Corporation had adopted a purchasing policy; however, the policy did not conform to the procurement standards outlined in 2 CFR 200.318 through 2 CFR 200.326. The policy did not reflect applicable state laws and regulations, avoid acquisition of unnecessary or duplicative items, ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service being procured, and ensure that all solicitations identify all requirements which the offerors must fulfill and other factors to be used in evaluating bids or proposals. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. If it is determined a single source provider can be used for a small purchase, documentation must be retained supporting the determination. There were forty-seven vendors identified that fell within the small purchases threshold. Eight of the vendors were selected for testing. For eight of eight vendors tested that fell within the small purchases threshold, the School Corporation did not obtain an adequate number of price or rate quotations to ensure the procurements provided full and open competition. In addition, history of the procurements which would include the rationale for the method of procurement, selection of the vendor, and basis for price was not documented. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Upon inquiry of the School Corporation, it was determined there was a process in place to verify that vendors were not suspended or debarred, or otherwise excluded or disqualified from participation in the federal award, prior to entering into a covered transaction. One employee was responsible for checking SAM exclusions by running a vendor exclusion list and comparing that list to a vendor history report from the School Corporation's financial software. However, there was no documented oversight, review, or approval process to ensure the process was completed and accurate. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-001 Procurement 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. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $3,500 ($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. 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(c); the competitive proposals method under the conditions specified in 2 CFR section 200.320(d); 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(f). 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(d)). 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.” Non-federal entities had a grace period of two full fiscal years after the effective date of the Uniform Guidance before they had to comply with the procurement requirements of 2 CFR section 200. For a non-federal entity with a fiscal year-end of June 30, its effective date for the procurement requirements was July 1, 2017. However, during this grace period, non-federal entities were required to clearly document whether they decided to comply with the previous version of the applicable procurement standards or the new standards contained in the Uniform Guidance. Condition: The City has not updated its purchasing policies and procedures to bring it into compliance with the requirements of Uniform Guidance. The City has also not formally documented whether it has decided to extend its applicable date of compliance with 2 CFR part 200 to be effective beginning July 1, 2018. The City is not in compliance with the procurement policy provisions of 2 CFR part 200 and the Uniform Guidance. Not updating the City’s procurement policy could lead to future findings and questioned costs related to federal awards. The current audit did not identify noncompliance with direct and material compliance requirements of the major federal award program. The City has not updated its purchasing policies and procedures to bring it into compliance with the requirements of Uniform Guidance. The City has also not formally documented whether it has decided to extend its applicable date of compliance with 2 CFR part 200 to be effective beginning July 1, 2018. Context: See condition above for context of the finding. Cause: The City has not evaluated its existing procurement policies for compliance with the requirements of the Uniform Guidance. Effect: The City is not in compliance with the procurement policy provisions of 2 CFR part 200 and the Uniform Guidance. Not updating the City’s procurement policy could lead to future findings and questioned costs related to federal awards. The current audit did not identify noncompliance with direct and material compliance requirements of the major federal award program. Identification as a Repeat Finding: Yes. 2022-001. Recommendation: The City should evaluate and update existing purchasing policies and procedures in order to bring the City into compliance with the procurement policy requirements of 2 CFR part 200 and the Uniform Guidance. The updated policy should include, among other things: 1. Thresholds and appropriate approval procedures for allowable federal procurement methods. 2. Written standards for how conflicts of interest involving employees engaged to select, award, and administer contracts will be governed. 3. How to ensure that contracts and awards are made only to responsible and eligible contractors and how oversight of contractor performance will be monitored. 4. How records will be maintained in order to document the history of federal procurements. Views of Responsible Officials: The City is still in the process of working with an outside firm on a review of procurement and purchasing policies. The consultation includes compliance review of this standard. Expected completion – FYE 2024.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2023-001 Repeat Finding: Yes - 2022-001, 2021-001 Program Names/ Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127, AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2023-001-00 N/A Formula Grants for Rural Areas and Tribal Transit Program 20.509 CA-2021-028-00, CA-2022-226-00, CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context During our review of procurement, the following were noted: For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. For two purchases in the YCIPTA’s quote range, the YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views of Responsible Officials See Corrective Action Plan.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2023-001 Repeat Finding: Yes - 2022-001, 2021-001 Program Names/ Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127, AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2023-001-00 N/A Formula Grants for Rural Areas and Tribal Transit Program 20.509 CA-2021-028-00, CA-2022-226-00, CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context During our review of procurement, the following were noted: For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. For two purchases in the YCIPTA’s quote range, the YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views of Responsible Officials See Corrective Action Plan.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2023-001 Repeat Finding: Yes - 2022-001, 2021-001 Program Names/ Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127, AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2023-001-00 N/A Formula Grants for Rural Areas and Tribal Transit Program 20.509 CA-2021-028-00, CA-2022-226-00, CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context During our review of procurement, the following were noted: For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. For two purchases in the YCIPTA’s quote range, the YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views of Responsible Officials See Corrective Action Plan.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2023-001 Repeat Finding: Yes - 2022-001, 2021-001 Program Names/ Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127, AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2023-001-00 N/A Formula Grants for Rural Areas and Tribal Transit Program 20.509 CA-2021-028-00, CA-2022-226-00, CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context During our review of procurement, the following were noted: For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. For two purchases in the YCIPTA’s quote range, the YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views of Responsible Officials See Corrective Action Plan.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2023-001 Repeat Finding: Yes - 2022-001, 2021-001 Program Names/ Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127, AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2023-001-00 N/A Formula Grants for Rural Areas and Tribal Transit Program 20.509 CA-2021-028-00, CA-2022-226-00, CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context During our review of procurement, the following were noted: For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. For two purchases in the YCIPTA’s quote range, the YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views of Responsible Officials See Corrective Action Plan.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2023-001 Repeat Finding: Yes - 2022-001, 2021-001 Program Names/ Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127, AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2023-001-00 N/A Formula Grants for Rural Areas and Tribal Transit Program 20.509 CA-2021-028-00, CA-2022-226-00, CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context During our review of procurement, the following were noted: For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. For two purchases in the YCIPTA’s quote range, the YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views of Responsible Officials See Corrective Action Plan.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2023-001 Repeat Finding: Yes - 2022-001, 2021-001 Program Names/ Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127, AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2023-001-00 N/A Formula Grants for Rural Areas and Tribal Transit Program 20.509 CA-2021-028-00, CA-2022-226-00, CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context During our review of procurement, the following were noted: For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. For two purchases in the YCIPTA’s quote range, the YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views of Responsible Officials See Corrective Action Plan.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2023-001 Repeat Finding: Yes - 2022-001, 2021-001 Program Names/ Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127, AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2023-001-00 N/A Formula Grants for Rural Areas and Tribal Transit Program 20.509 CA-2021-028-00, CA-2022-226-00, CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context During our review of procurement, the following were noted: For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. For two purchases in the YCIPTA’s quote range, the YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views of Responsible Officials See Corrective Action Plan.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2023-001 Repeat Finding: Yes - 2022-001, 2021-001 Program Names/ Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127, AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2023-001-00 N/A Formula Grants for Rural Areas and Tribal Transit Program 20.509 CA-2021-028-00, CA-2022-226-00, CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context During our review of procurement, the following were noted: For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. For two purchases in the YCIPTA’s quote range, the YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views of Responsible Officials See Corrective Action Plan.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2023-001 Repeat Finding: Yes - 2022-001, 2021-001 Program Names/ Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127, AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2023-001-00 N/A Formula Grants for Rural Areas and Tribal Transit Program 20.509 CA-2021-028-00, CA-2022-226-00, CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context During our review of procurement, the following were noted: For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. For two purchases in the YCIPTA’s quote range, the YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views of Responsible Officials See Corrective Action Plan.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2023-001 Repeat Finding: Yes - 2022-001, 2021-001 Program Names/ Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127, AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2023-001-00 N/A Formula Grants for Rural Areas and Tribal Transit Program 20.509 CA-2021-028-00, CA-2022-226-00, CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context During our review of procurement, the following were noted: For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. For two purchases in the YCIPTA’s quote range, the YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views of Responsible Officials See Corrective Action Plan.
WIC Special Supplemental Nutrition Program for Women, Infants, and Children Assistance Listing No. 10.557 U.S. Department of Agriculture Criteria or Specific Requirement – Procurement (45 CFR 200.318-200.326) Condition - The Health System entered into various professional services contracts for marketing, advertising, and information dissemination that do not exceed the simplified acquisition threshold and are considered micro-purchase awards but did not maintain appropriate documentation to document the price reasonableness based on research, experience, and purchase history to support its procurement decisions. Questioned Costs - None Context - We tested two out of a total of seven contracts that were considered micro-purchases. The sample was not intended to be, and was not, a statistically valid sample. During our testing of procurement requirements, the two vendor contracts tested over the micro-purchase threshold did not have appropriate documentation to evidence the basis of vendor selection (documentation of the price reasonableness based on research, experience, and purchase history). Effect - Micro-purchases were made without appropriate documentation to comply with Uniform Guidance requirements. Cause - The Organization does not have a comprehensive procurement policy that is in line with Uniform Guidance requirements. Adequate supporting documentation on the procurements were not obtained or maintained within vendor files and vendor contracts do not contain the necessary contract provision and language required by the Uniform Guidance. Repeat Finding - No Recommendation - We recommend the Health System revisit controls over this compliance requirement to ensure that appropriate documentation is gathered and retained within its procurement files to support all Federally funded purchasing decisions. We also recommend the Organization perform a comprehensive review of its procurement policy and ensure that it is in compliance and in-line with the procurement requirements of the Uniform Guidance.
Finding 2023-004 – Material Weakness AL No: 20.507 Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula Grants - Direct Award. Compliance Requirement: Procurement, Suspension and Debarment. Condition: The District was unable to provide documentation that the procurement of the CNG tank replacement project for five Orion buses exceeding the simplified acquisition threshold of $250,000 was approved by the Board. There is documentation that an invitation for bid (IFB) was released for the project, but only one bid was received and the District awarded the contract to the sole bidder. Missing documentation includes support of the rationale to approve the contract absent evidence of full and open competition. The District was also not able to provide the request for proposal for review. Criteria: 2 CFR Part 200 Subpart E (Uniform Guidance) states the following: Section 200.318(a) states that “The non-federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or service required under a Federal award or subaward. The non-Federal entity’s documented procurement procedures must conform to the procurement standards identified in Sections 200.317 through 200.327.” Section 200.318(i) states that “The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” Section 200.320(c) states that “There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold…; (2) The item is available only from a single source; (3) The public exigency or emergency for the retirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non- Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate.” Section 200.324(a) states that “The non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals.” Cause: Staff turnover at the District and the need for the project to be completed by a certain date to avoid the buses losing certification led to the lack of adequate records being maintained. Effect: The District was unable to prove it was in compliance with the Uniform Guidance regarding open competition on procurements. Context: The CNG tank replacement needed to be completed by a certain timeframe in order for the buses to be operational, so not every step was documented. The awarded contract was signed on the date of a Board meeting, but the Board minutes did not document that this contract was reviewed nor approved by the Board. Recommendation: We recommend the District establish a procurement folder on its server with subfolders for each individual procurement where documentation of each procurement is maintained, including advertising of the procurement, requests for proposals, proposals received, analysis of reasons for selecting the winning bid, executed contract, certifications by contractor if not part of proposal or executed contract, management report to board recommending which bid should be approved, board resolution approving the winning bid and for contracts under $250,000 a memo or form documenting bids received and reason for selecting the bid, including reasons for not selecting the lowest bid if applicable. We also recommend training be provided to staff that work on procurements of the requirements under Uniform Guidance Section 2 CFR 200.318 to 200.326. View of Responsible Officials and Planned Corrective Action: Management’s response and planned corrective action is included at the Corrective Action Plan end of this report.
2023-002: Lack of Documentation for Procurement, Suspension and Debarment Testing Federal Department: Department of Labor Assistance Listing #: 17.274 Material Weakness in Internal Controls and Noncompliance Category of Finding – Procurement, Suspension, and Debarment Criteria - Uniform Guidance and 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 - There was no documentation maintained related to the search for price comparisons or suspension and debarment testing performed on vendors. Context – It was communicated by management during audit fieldwork that there was no documentation maintained related to the search for price comparisons or suspension and debarment testing performed on vendors. Cause – Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, therefore controls were not adequately designed to ensure compliance with all of these requirements. Effect - Increased overall risk that Change Inc. is contracting and awarding contracts to suspended or debarred vendors or is not obtaining the best possible prices for goods or services. Recommendation - We recommend that management implement a process to perform price comparisons and suspension and debarment testing as required by their procurement policy, and that as part of this process they maintain adequate supporting documentation and records to document history and methods of procurement, suspension, and debarment and the procedures performed to comply with these CFR sections. This could include the use of standard forms and templates for purchase orders, contracts, cost/price analyses, bid evaluation, and suspension & debarment testing. Auditee’s comments and response – Management is in agreement with this finding. Management is in the process of obtaining additional training and updating processes to comply with these requirements. Responsible party for corrective action: Jill Johnson, Associate Director Repeat Finding: 2022-003
2023-002: Lack of Documentation for Procurement, Suspension and Debarment Testing Federal Department: Department of Labor Assistance Listing #: 17.274 Material Weakness in Internal Controls and Noncompliance Category of Finding – Procurement, Suspension, and Debarment Criteria - Uniform Guidance and 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 - There was no documentation maintained related to the search for price comparisons or suspension and debarment testing performed on vendors. Context – It was communicated by management during audit fieldwork that there was no documentation maintained related to the search for price comparisons or suspension and debarment testing performed on vendors. Cause – Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, therefore controls were not adequately designed to ensure compliance with all of these requirements. Effect - Increased overall risk that Change Inc. is contracting and awarding contracts to suspended or debarred vendors or is not obtaining the best possible prices for goods or services. Recommendation - We recommend that management implement a process to perform price comparisons and suspension and debarment testing as required by their procurement policy, and that as part of this process they maintain adequate supporting documentation and records to document history and methods of procurement, suspension, and debarment and the procedures performed to comply with these CFR sections. This could include the use of standard forms and templates for purchase orders, contracts, cost/price analyses, bid evaluation, and suspension & debarment testing. Auditee’s comments and response – Management is in agreement with this finding. Management is in the process of obtaining additional training and updating processes to comply with these requirements. Responsible party for corrective action: Jill Johnson, Associate Director Repeat Finding: 2022-003
Finding 2023-002 Program Name: WIC 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 (USDA) and and U.S. Department of Health and Human Services Finding Type: Material Weakness Compliance Requirement: Procurement Condition: Ampla Health did not have adequate procurement policies in place that meet the minimum federal requirements for procurement standards. We examined the procurement records for nine vendors where Ampla Health expended federal funds. For all four sole source procurement records reviewed, Ampla Health did not retain documentation of the sole source determination or have an approved sole source vendor list. For two of three vendors selected in the small acquisition threshold, Ampla Health could not provide competing quotes or sufficient evidence to demonstrate procurement was performed. For one of three vendors selected in the small acquisition threshold, Ampla Health was only able to provide procurement support for a portion of the funds expended. Criteria: Under 2 CFR sections 200.318 through 200.326 and 45 CFR 75.327 Ampla Health is required to implement certain written procurement policies and procedures that adhere to the minimum Federal Procurement standards. Ampla Health 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 identified in 2 CFR part 200 and maintain sufficient records to detail the history of procurements. Cause: Ampla Health did not have a policy in place that meets the minimum federal requirements under Uniform Guidance. In addition, Ampla Health could not provide support to demonstrate that it performed the necessary procurement steps or retained documentation demonstrating compliance with Uniform Guidance for purchases made with federal funds. Effect: Ampla Health was not in compliance with federal regulations or their own policies. Recommendation: Ampla Health 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. Additionally, management should ensure individuals participating in the procurement process receive adequate training and guidance on procurement rules under the Uniform Guidance. View of Responsible Officials: Management will review the procurement policy and make necessary changes to ensure the policy meets all federal requirements.
Finding 2023-002 Program Name: WIC 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 (USDA) and and U.S. Department of Health and Human Services Finding Type: Material Weakness Compliance Requirement: Procurement Condition: Ampla Health did not have adequate procurement policies in place that meet the minimum federal requirements for procurement standards. We examined the procurement records for nine vendors where Ampla Health expended federal funds. For all four sole source procurement records reviewed, Ampla Health did not retain documentation of the sole source determination or have an approved sole source vendor list. For two of three vendors selected in the small acquisition threshold, Ampla Health could not provide competing quotes or sufficient evidence to demonstrate procurement was performed. For one of three vendors selected in the small acquisition threshold, Ampla Health was only able to provide procurement support for a portion of the funds expended. Criteria: Under 2 CFR sections 200.318 through 200.326 and 45 CFR 75.327 Ampla Health is required to implement certain written procurement policies and procedures that adhere to the minimum Federal Procurement standards. Ampla Health 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 identified in 2 CFR part 200 and maintain sufficient records to detail the history of procurements. Cause: Ampla Health did not have a policy in place that meets the minimum federal requirements under Uniform Guidance. In addition, Ampla Health could not provide support to demonstrate that it performed the necessary procurement steps or retained documentation demonstrating compliance with Uniform Guidance for purchases made with federal funds. Effect: Ampla Health was not in compliance with federal regulations or their own policies. Recommendation: Ampla Health 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. Additionally, management should ensure individuals participating in the procurement process receive adequate training and guidance on procurement rules under the Uniform Guidance. View of Responsible Officials: Management will review the procurement policy and make necessary changes to ensure the policy meets all federal requirements.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2023‐002 Repeat Finding: No Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization 15.042 A22AV00871 N/A Indian School Student Transportation 15.044 A22AV00871 N/A Federal Agency: U.S. Department of the Interior Pass‐Through Agency: Bureau of Indian Affairs Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement and Suspension and Debarment Criteria Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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 Documentation for procurement performed for purchases below the Simplified Acquisition threshold of $250,000 was not maintained. Cause School and federal policies to obtain three quotes for purchases between $10,000 and $249,000 were not followed. Effect The School was not in compliance with federal regulations and guidelines or school policy. Context The sample was not intended to be, and was not, a statistically valid sample. For all five disbursements reviewed, the School did not obtain three quotes in accordance School or federal policy. Recommendation The School should adhere to its Board adopted policies and federal regulations. The School should implement stronger controls to ensure procurement guidelines are followed. Views of Responsible Officials See Corrective Action Plan.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2023‐002 Repeat Finding: No Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization 15.042 A22AV00871 N/A Indian School Student Transportation 15.044 A22AV00871 N/A Federal Agency: U.S. Department of the Interior Pass‐Through Agency: Bureau of Indian Affairs Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement and Suspension and Debarment Criteria Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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 Documentation for procurement performed for purchases below the Simplified Acquisition threshold of $250,000 was not maintained. Cause School and federal policies to obtain three quotes for purchases between $10,000 and $249,000 were not followed. Effect The School was not in compliance with federal regulations and guidelines or school policy. Context The sample was not intended to be, and was not, a statistically valid sample. For all five disbursements reviewed, the School did not obtain three quotes in accordance School or federal policy. Recommendation The School should adhere to its Board adopted policies and federal regulations. The School should implement stronger controls to ensure procurement guidelines are followed. Views of Responsible Officials See Corrective Action Plan.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2023‐002 Repeat Finding: No Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization 15.042 A22AV00871 N/A Indian School Student Transportation 15.044 A22AV00871 N/A Federal Agency: U.S. Department of the Interior Pass‐Through Agency: Bureau of Indian Affairs Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement and Suspension and Debarment Criteria Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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 Documentation for procurement performed for purchases below the Simplified Acquisition threshold of $250,000 was not maintained. Cause School and federal policies to obtain three quotes for purchases between $10,000 and $249,000 were not followed. Effect The School was not in compliance with federal regulations and guidelines or school policy. Context The sample was not intended to be, and was not, a statistically valid sample. For all five disbursements reviewed, the School did not obtain three quotes in accordance School or federal policy. Recommendation The School should adhere to its Board adopted policies and federal regulations. The School should implement stronger controls to ensure procurement guidelines are followed. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2023‐001 Repeat Finding: Yes, 2022‐001 Program Name/Assistance Listing Title: Indian School Equalization Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A22AV00856 Pass‐Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension and Debarment Criteria Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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 Adequate internal controls over its procurement procedures to ensure compliance with federal regulations and guidelines and School policies were not in place. The School did not establish complete written procurement standards. In addition, the School did not follow federal guidelines for purchases exceeding the small purchases threshold. Cause The School’s internal controls over procurement of goods and services were not adequate. Effect The School was not in compliance with Federal regulations and guidelines related to procurement. Context During our review of purchasing, we noted the following: - Sealed bids were not performed in accordance with School policies. However, these purchases did not rise above the Simplified Acquisition Threshold. - For eight of 10 vendors reviewed with total expenditures below the Simplified Acquisition threshold, no documentation of quotes was maintained. - The School's policy did not include any language regarding quotes and thresholds. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The School should develop and implement policies and procedures to ensure compliance with federal procurement requirements. Views of Responsible Officials See Corrective Action Plan.
Small Business Administration Financial Assistance Listing #59.008 COVID‐19 Disaster Assistance Loans Procurement Material Noncompliance and Material Weakness in Internal Control over Compliance Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (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. The Organization is required to create a written procurement, suspension, and debarment policy that complies with applicable federal requirements and to follow this policy when procuring goods and services. The Organization is also required to retain documentation supporting performance of a price analysis, open competition, and review for suspension and debarment. Condition: The Organization does not have a written procurement policy. Additionally, there was no documentation to support a price analysis over the transactions tested or documentation supporting that vendors were reviewed for suspension and debarment. There was also no documentation for review of the procurement transactions tested. Cause: The Organization had turnover and limited staffing available. Effect: The Organization did not ensure that the procurement policy was complete and accurate. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 4 transactions out of 9 procurement transactions were selected for testing, which accounted for $156,353 of $297,188 of federal program expenditures. Repeat Finding from Prior Year(s): No Recommendation: We recommend the Organization’s management implement a written procurement policy to follow and documenting the performance of required procurement procedures. Views of Responsible Officials: Management agrees with the finding.
PROCUREMENT--Questioned Costs: None How the questioned costs were computed: N/A Condition: Wipfli obtained the supporting documentation for purchases of client furnishings, food, a vehicle, and lawn care services. The documentation indicated these vendors were selected based on best price. Turning Point of Central California, Inc. was able to provide explanations for why the vendors were selected, but procurement records supporting the explanations were not available. In addition, Wipfli noted Turning Point of Central California, Inc.’s procurement policy included references to outdated federal regulations and did not comply with all of the procurement requirements in the Uniform Guidance (2 CFR Part 200). This is a repeat finding from the June 30, 2021 and 2022 audits. Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR Part 200, section 318(i) (Uniform Guidance) states that the non-Federal entity must maintain records sufficient to detail the history of procurement. The records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contractor type, contractor selection or rejection, and the basis for the contract price. In addition, the Uniform Guidance, 2 CFR Part 200, section 200.118 states that the non-Federal entity must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 and must use their own documented procurement procedures that must conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Section III - Federal Award Findings and Questioned Costs (Continued) Finding 2023-002: Procurement (Continued) Cause: Turning Point of Central California, Inc. did not retain procurement records to support its assertion that it is contracting with vendors that provide the best prices. Turning Point of Central California, Inc. has not updated its procurement policy to comply with the Uniform Guidance (2 CFR Part 200). This finding was first reported in the June 30, 2021 and 2022 audits, issued in June 2022 and June 2023, respectively, and Turning Point of Central California, Inc. did not have adequate time to implement its corrective action plan during the year ended June 30, 2023. Effect: Due to the conditions noted above, Turning Point of Central California, Inc. was not in compliance with the procurement regulations and there exists a material weakness in internal controls over the procurement compliance requirement. Recommendation: We recommend Turning Point of Central California, Inc. implement controls to ensure the procurement decisions are properly documented in accordance with updated internal policies and procedures that conform to the Uniform Guidance (2 CFR Part 200). View of responsible officials: Management agrees with the finding and has submitted a corrective action plan.
Finding 2023-001: Paper/Chemical Product Contract Federal Agency: U.S. Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559/10.582 Compliance Requirement: Procurement, Suspension and Debarment Award Period: Fiscal Year 2023 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. Condition/Context: The Board did not follow the established procurement policy for their paper/chemical contract. Questioned Costs: Undetermined Cause: The Board allowed prior bid contract to expire. Effect: The Board did not have a competitively bid contract in place during fiscal year 2023 for paper/chemical products. Repeat Finding: No Recommendation: We recommend following the Board’s established procurement policy providing for competitive bid. Views of Responsible Officials: The Board has addressed this finding. Beginning in December 2023, the Board has entered into a contract with a vendor that was awarded the competitive bid for paper/chemical products.
Finding 2023-001: Paper/Chemical Product Contract Federal Agency: U.S. Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559/10.582 Compliance Requirement: Procurement, Suspension and Debarment Award Period: Fiscal Year 2023 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. Condition/Context: The Board did not follow the established procurement policy for their paper/chemical contract. Questioned Costs: Undetermined Cause: The Board allowed prior bid contract to expire. Effect: The Board did not have a competitively bid contract in place during fiscal year 2023 for paper/chemical products. Repeat Finding: No Recommendation: We recommend following the Board’s established procurement policy providing for competitive bid. Views of Responsible Officials: The Board has addressed this finding. Beginning in December 2023, the Board has entered into a contract with a vendor that was awarded the competitive bid for paper/chemical products.
Finding 2023-001: Paper/Chemical Product Contract Federal Agency: U.S. Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559/10.582 Compliance Requirement: Procurement, Suspension and Debarment Award Period: Fiscal Year 2023 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. Condition/Context: The Board did not follow the established procurement policy for their paper/chemical contract. Questioned Costs: Undetermined Cause: The Board allowed prior bid contract to expire. Effect: The Board did not have a competitively bid contract in place during fiscal year 2023 for paper/chemical products. Repeat Finding: No Recommendation: We recommend following the Board’s established procurement policy providing for competitive bid. Views of Responsible Officials: The Board has addressed this finding. Beginning in December 2023, the Board has entered into a contract with a vendor that was awarded the competitive bid for paper/chemical products.
Finding 2023-001: Paper/Chemical Product Contract Federal Agency: U.S. Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559/10.582 Compliance Requirement: Procurement, Suspension and Debarment Award Period: Fiscal Year 2023 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. Condition/Context: The Board did not follow the established procurement policy for their paper/chemical contract. Questioned Costs: Undetermined Cause: The Board allowed prior bid contract to expire. Effect: The Board did not have a competitively bid contract in place during fiscal year 2023 for paper/chemical products. Repeat Finding: No Recommendation: We recommend following the Board’s established procurement policy providing for competitive bid. Views of Responsible Officials: The Board has addressed this finding. Beginning in December 2023, the Board has entered into a contract with a vendor that was awarded the competitive bid for paper/chemical products.
Assistance Listing Number 84.041 Impact Aid Department of Education North Dakota Department of Public Instruction Special Tests and Provisions 2 CFR Part 200.326 Criteria For construction contracts and subcontracts greater than $2,000 funded with federal dollars, the District should verify prevailing wage rate clauses were included in the contract or subcontract and for each week in which work was performed under the contract or subcontract the District should monitor certified payroll registers to ensure contractors and subcontractors were paying employees the prevailing wage rates. Condition The District did not provide the wage rate clauses to contractors. In addition, the District did not obtain from contractors the certified payroll registers, nor did they perform testing to ensure contractors were paying the prevailing wage rates. Cause The District was unaware of the compliance requirements regarding the construction projects. Effect The District is not in compliance with Wage Rate Requirements, a part of the Special Tests and Provisions. Questioned Costs Undeterminable. Repeat Finding This is not a repeat finding. Recommendation We recommend the District to review the wage rate compliance requirements as part of the special tests and provisions of this program in the compliance supplement and to create and implement a process of submitting prevailing wage rates to contractors as well as obtaining the certified payroll registers to determine if contractors are in compliance. Management’s Response The District will plan to get payroll registers monthly from contractors moving forward.
Assistance Listing Number 84.041 Impact Aid Department of Education North Dakota Department of Public Instruction Special Tests and Provisions 2 CFR Part 200.326 Criteria For construction contracts and subcontracts greater than $2,000 funded with federal dollars, the District should verify prevailing wage rate clauses were included in the contract or subcontract and for each week in which work was performed under the contract or subcontract the District should monitor certified payroll registers to ensure contractors and subcontractors were paying employees the prevailing wage rates. Condition The District did not provide the wage rate clauses to contractors. In addition, the District did not obtain from contractors the certified payroll registers, nor did they perform testing to ensure contractors were paying the prevailing wage rates. Cause The District was unaware of the compliance requirements regarding the construction projects. Effect The District is not in compliance with Wage Rate Requirements, a part of the Special Tests and Provisions. Questioned Costs Undeterminable. Repeat Finding This is not a repeat finding. Recommendation We recommend the District to review the wage rate compliance requirements as part of the special tests and provisions of this program in the compliance supplement and to create and implement a process of submitting prevailing wage rates to contractors as well as obtaining the certified payroll registers to determine if contractors are in compliance. Management’s Response The District will plan to get payroll registers monthly from contractors moving forward.
Assistance Listing Number 84.425 Education Stabilization Fund Department of Education North Dakota Department of Public Instruction Special Tests and Provisions 2 CFR Part 200.326 Criteria For construction contracts and subcontracts greater than $2,000 funded with federal dollars, the District should verify prevailing wage rate clauses were included in the contract or subcontract and for each week in which work was performed under the contract or subcontract the District should monitor certified payroll registers to ensure contractors and subcontractors were paying employees the prevailing wage rates. Condition The District did not provide the wage rate clauses to contractors. In addition, the District did not obtain from contractors the certified payroll registers, nor did they perform testing to ensure contractors were paying the prevailing wage rates. Cause The District was unaware of the compliance requirements regarding the construction projects. Effect The District is not in compliance with Wage Rate Requirements, a part of the Special Tests and Provisions. Questioned Costs Undeterminable. Repeat Finding This is a repeat finding of 2022-003. Recommendation We recommend the District to review the wage rate compliance requirements as part of the special tests and provisions of this program in the compliance supplement and to create and implement a process of submitting prevailing wage rates to contractors as well as obtaining the certified payroll registers to determine if contractors are in compliance. Management’s Response The District will plan to get payroll registers monthly from contractors moving forward.
Assistance Listing Number 84.425 Education Stabilization Fund Department of Education North Dakota Department of Public Instruction Special Tests and Provisions 2 CFR Part 200.326 Criteria For construction contracts and subcontracts greater than $2,000 funded with federal dollars, the District should verify prevailing wage rate clauses were included in the contract or subcontract and for each week in which work was performed under the contract or subcontract the District should monitor certified payroll registers to ensure contractors and subcontractors were paying employees the prevailing wage rates. Condition The District did not provide the wage rate clauses to contractors. In addition, the District did not obtain from contractors the certified payroll registers, nor did they perform testing to ensure contractors were paying the prevailing wage rates. Cause The District was unaware of the compliance requirements regarding the construction projects. Effect The District is not in compliance with Wage Rate Requirements, a part of the Special Tests and Provisions. Questioned Costs Undeterminable. Repeat Finding This is a repeat finding of 2022-003. Recommendation We recommend the District to review the wage rate compliance requirements as part of the special tests and provisions of this program in the compliance supplement and to create and implement a process of submitting prevailing wage rates to contractors as well as obtaining the certified payroll registers to determine if contractors are in compliance. Management’s Response The District will plan to get payroll registers monthly from contractors moving forward.
Federal Agency: U.S. Department of Justice Federal Program Title: Crime Victim Assistance Federal Assistance Listing Number: 16.575 Pass-Through Agency: Minnesota Office of Justice Programs Pass-Through Number(s): A-CVS-2022-AMS-157 Award Period: 10/01/2021 to 09/30/2023 Type of Finding: • Material Weakness in Internal Control over Major Federal Programs, Material Noncompliance, and Other Matters 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. Condition: The Organization does not have a written procurement policy in accordance with Uniform Guidance. In addition, during our testing, we noted the Organization did not apply any procurement procedures for three small purchases as they did not perform appropriate procedures nor retain adequate documentation in accordance with Uniform Guidance. Questioned Costs: $46,557 Context: The Organization should develop a procurement policy that conforms with Uniform Guidance. Three out of the three procurement selections did not have procurement procedures followed. Cause: The Organization was unaware its policy was not in accordance with Uniform Guidance; thus, leading to the lack of procedures performed and documentation retained. 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 also provide training to the various individuals involved in the procurement process to ensure they understand the applicable requirements. Views of Responsible Officials and Planned Corrective Actions: The Organization will review the procurement standards as well as provide the necessary training to understand applicable procurement requirements.
Finding – Internal control deficiencies over procurement requirements Identification of the Federal Program: Assistance Listing Number and Title: 14.231, Emergency Solutions Grant Coronavirus Program Federal Grantor Name: U.S. Department of Housing and Urban Development Federal Award/Contract Number: NA Pass-through Entity Name: California Department of Housing and Community Development Pass-through Award/Contract Number: 20-ESGCV-3-00002 Compliance Requirement – Procurement and Suspension and Debarment Condition: The City did not comply with 2 CFR 200.320 or with City procurement policies. The City did not obtain quotes for vehicles purchased. Criteria: Grant recipients must comply with Uniform Guidance for procurement, specifically with 2 CFR sections 200.318 thru 200.326 including ensuring the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320(a)(1) and (2). Cause: The City did not have proper internal control over the procurement requirements of this federal program. Effect: The City is out of compliance with procurement requirements. Questioned Costs: $199,274 Context: A small purchase could have been applied as the total amount spent under the contract was more than the micro-purchase amount but less than the simplified acquisition threshold. Under small purchase procedures price or rate quotes must be obtained. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that the City establish and maintain effective internal control ensuring an understanding of procurement compliance requirements prior to entering into contracts with vendors with the intention of using grant monies. Views of responsible officials: Management concurs with the finding.
2023-004: Reporting – Material Weakness Federal Programs Assistance Listing Number 84.425 Education Stabilization Fund Department of Education North Dakota Department of Public Instruction Special Test and Provisions 2 CFR Part 200.326 F84425U 2023 Grant Year Criteria For construction contracts and subcontracts greater than $2,000, the District should verify prevailing wage rate clauses were included in the contract or subcontract and for each week in which work was performed under the contract or subcontract the District should monitor certified payroll registers to ensure contractors and subcontractors were paying employees the prevailing wage rates. Condition The District did not provide wage rate clauses to contractors. In addition, the District did not obtain from contractors the certified payroll registers, nor did they perform testing to ensure contractors were paying the prevailing wage rates. Cause The District was unaware of the compliance requirements regarding the construction projects. Effect It is possible that improper wages were paid to contractor employees. Questioned Costs Undeterminable. Recommendation We recommend the District to review the wage rate compliance requirements as part of the special tests and provisions of this program in the compliance supplement and to create and implement a process of submitting prevailing wage rates to contractors as well as obtaining the certified payroll registers to determine if contractors are in compliance. Repeat Finding This is not a repeat finding. Views of Responsible Officials See corrective action plan.
2023-004: Reporting – Material Weakness Federal Programs Assistance Listing Number 84.425 Education Stabilization Fund Department of Education North Dakota Department of Public Instruction Special Test and Provisions 2 CFR Part 200.326 F84425U 2023 Grant Year Criteria For construction contracts and subcontracts greater than $2,000, the District should verify prevailing wage rate clauses were included in the contract or subcontract and for each week in which work was performed under the contract or subcontract the District should monitor certified payroll registers to ensure contractors and subcontractors were paying employees the prevailing wage rates. Condition The District did not provide wage rate clauses to contractors. In addition, the District did not obtain from contractors the certified payroll registers, nor did they perform testing to ensure contractors were paying the prevailing wage rates. Cause The District was unaware of the compliance requirements regarding the construction projects. Effect It is possible that improper wages were paid to contractor employees. Questioned Costs Undeterminable. Recommendation We recommend the District to review the wage rate compliance requirements as part of the special tests and provisions of this program in the compliance supplement and to create and implement a process of submitting prevailing wage rates to contractors as well as obtaining the certified payroll registers to determine if contractors are in compliance. Repeat Finding This is not a repeat finding. Views of Responsible Officials See corrective action plan.
U.S. Department of Housing and Urban Development ‐ CFDA #14.267 Continuum of Care Program Applicable Federal Award Number and Year – AZ0089L9T022114, AZ0170L9T022106, AZ0170L9T022005, AZ0132L9T022109, AZ0132L9T022008, AZ0192L9T022003, AZ0192L9T022104, AZ0090L9T022013 ‐ 2023 / 2022 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance 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: During our testing, we identified that the Organization was not following their procurement policy. The Organization’s procurement policy is to obtain a minimum of 3 written bids for purchases greater than $10,000. The Organization selected an approved GSA vendor as allowed by Uniform Guidance; however, the Organization didn’t obtain any written bids as required by their procurement policy. Cause: Due to a lack of understanding of the procurement policy, the Organization did not obtain 3 written bids. Effect: The Organization did not comply with their procurement policy. Questioned Costs: None reported. Context/Sampling: A non‐statistical sample of 2 expenditures were selected for testing. For 1 out of the 2 transactions selected, the Organization did not obtain 3 written bids as required by the procurement policy. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization implement internal controls to ensure the procurement policy is followed or update the procurement policy to follow the Organization’s current practice. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.267 Continuum of Care Program Applicable Federal Award Number and Year – AZ0089L9T022114, AZ0170L9T022106, AZ0170L9T022005, AZ0132L9T022109, AZ0132L9T022008, AZ0192L9T022003, AZ0192L9T022104, AZ0090L9T022013 ‐ 2023 / 2022 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance 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: During our testing, we identified that the Organization was not following their procurement policy. The Organization’s procurement policy is to obtain a minimum of 3 written bids for purchases greater than $10,000. The Organization selected an approved GSA vendor as allowed by Uniform Guidance; however, the Organization didn’t obtain any written bids as required by their procurement policy. Cause: Due to a lack of understanding of the procurement policy, the Organization did not obtain 3 written bids. Effect: The Organization did not comply with their procurement policy. Questioned Costs: None reported. Context/Sampling: A non‐statistical sample of 2 expenditures were selected for testing. For 1 out of the 2 transactions selected, the Organization did not obtain 3 written bids as required by the procurement policy. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization implement internal controls to ensure the procurement policy is followed or update the procurement policy to follow the Organization’s current practice. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.267 Continuum of Care Program Applicable Federal Award Number and Year – AZ0089L9T022114, AZ0170L9T022106, AZ0170L9T022005, AZ0132L9T022109, AZ0132L9T022008, AZ0192L9T022003, AZ0192L9T022104, AZ0090L9T022013 ‐ 2023 / 2022 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance 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: During our testing, we identified that the Organization was not following their procurement policy. The Organization’s procurement policy is to obtain a minimum of 3 written bids for purchases greater than $10,000. The Organization selected an approved GSA vendor as allowed by Uniform Guidance; however, the Organization didn’t obtain any written bids as required by their procurement policy. Cause: Due to a lack of understanding of the procurement policy, the Organization did not obtain 3 written bids. Effect: The Organization did not comply with their procurement policy. Questioned Costs: None reported. Context/Sampling: A non‐statistical sample of 2 expenditures were selected for testing. For 1 out of the 2 transactions selected, the Organization did not obtain 3 written bids as required by the procurement policy. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization implement internal controls to ensure the procurement policy is followed or update the procurement policy to follow the Organization’s current practice. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.267 Continuum of Care Program Applicable Federal Award Number and Year – AZ0089L9T022114, AZ0170L9T022106, AZ0170L9T022005, AZ0132L9T022109, AZ0132L9T022008, AZ0192L9T022003, AZ0192L9T022104, AZ0090L9T022013 ‐ 2023 / 2022 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance 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: During our testing, we identified that the Organization was not following their procurement policy. The Organization’s procurement policy is to obtain a minimum of 3 written bids for purchases greater than $10,000. The Organization selected an approved GSA vendor as allowed by Uniform Guidance; however, the Organization didn’t obtain any written bids as required by their procurement policy. Cause: Due to a lack of understanding of the procurement policy, the Organization did not obtain 3 written bids. Effect: The Organization did not comply with their procurement policy. Questioned Costs: None reported. Context/Sampling: A non‐statistical sample of 2 expenditures were selected for testing. For 1 out of the 2 transactions selected, the Organization did not obtain 3 written bids as required by the procurement policy. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization implement internal controls to ensure the procurement policy is followed or update the procurement policy to follow the Organization’s current practice. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.267 Continuum of Care Program Applicable Federal Award Number and Year – AZ0089L9T022114, AZ0170L9T022106, AZ0170L9T022005, AZ0132L9T022109, AZ0132L9T022008, AZ0192L9T022003, AZ0192L9T022104, AZ0090L9T022013 ‐ 2023 / 2022 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance 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: During our testing, we identified that the Organization was not following their procurement policy. The Organization’s procurement policy is to obtain a minimum of 3 written bids for purchases greater than $10,000. The Organization selected an approved GSA vendor as allowed by Uniform Guidance; however, the Organization didn’t obtain any written bids as required by their procurement policy. Cause: Due to a lack of understanding of the procurement policy, the Organization did not obtain 3 written bids. Effect: The Organization did not comply with their procurement policy. Questioned Costs: None reported. Context/Sampling: A non‐statistical sample of 2 expenditures were selected for testing. For 1 out of the 2 transactions selected, the Organization did not obtain 3 written bids as required by the procurement policy. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization implement internal controls to ensure the procurement policy is followed or update the procurement policy to follow the Organization’s current practice. Views of Responsible Officials: Management agrees with the finding.