Significant Deficiency – Item 2023-002 – Insufficient Required Substantiating Documentation for Major Programs Condition: Several expenditures and reports were selected for substantive, controls, and compliance testing from the financial records for the major programs. In several cases, the source documents supporting the federal expenditures reported were not accurate, missing and/or properly described. For expenditures allocated between award programs benefitted there was no written allocation methodology used including how costs were calculated and charged to each program. Federal regulations required that all federal expenditures must be supported by adequate source documents and accounting and cost records. Documentation must stipulate the nature of the expenditure (exactly what the funds were spent on), the purpose of the cost, the applicable federal program name, the cost for each product and service that agrees with the financial records and report to the federal funding source. In addition, PCCD provides to all related providers their “Financial and Administrative Guide for Grants” that clearly stipulates the nature of all substantiating documentation and reporting for all federal expenditures. Several expenditures tested included evidence of accounting system-generated approvals. In several cases, the person purchasing products and services also approved the expenditure. Along with that approval, there was another approval by the CFO, but the sign off showed that name as “Inactive”. For one of the PCCD contracts with subrecipients, periodically the Organization provides advances. However there is no accounting for use of the advances, and unused balances at period end are not reported on the financial statements. There are very explicit federal guidelines for time and effort accounting and reporting. Testing revealed discrepancies between individual’s time records, the payroll and check registers, posting to the general ledger, and the periodic reports to funders. In certain cases, the HR Supervisor approved hours included in timesheets that were not accurate. The time sheet hours exceeded the amount subsequently paid to the individual. Reconciliation of differences was a difficult process and the end result was a remaining difference not explained. Some timesheets for the program manager showed every posting was labelled with the wrong federal program name. Criteria: All expenditures charged to federal programs must be clearly and completely supported by required documentation that agrees with amounts in the Organization’s general ledger and periodic reports to the federal grantor. Cause: The Organization does not maintain written policies and procedures for procurement and reporting related to all financial transactions under federally-funded programs, including allowable costs and other federal compliance requirements. Procurement policies must adhere to the “Uniform Administrative Requirements, Cost Principles and Audit Requirements” for federal awards in 2CFR200.318 through 200.326. There is no formal Accounting Manual that is periodically revised when new grants are awarded or when the personnel pool changes. The written document must include a code of conduct for the Organization. When a new federal award is granted to the Organization with specific financial and administrative requirements, the manual should be revised to incorporate those requirements. The Organization has also experienced turnover of key personnel in the Finance Department. Effect: Several expenditures selected for testing were not properly documented in accordance with federal regulations. In several cases, the only supporting documentation was adjusting journal entries posted to the general ledger. In one case, an amount of $5,200 was posted to the general ledger under “Other Supportive Services”, but the Organization could not provide a copy of the adjusting entry nor any related documentation or explanation. In July 2022, costs totaling $5,500 were recorded that were related to expenses incurred in June 2022. The result of these deficiencies may be misstatement of costs that are periodically reported for reimbursement by the funder. Questioned Costs: The total estimated questioned costs for both major programs was $19,451. Certain tested expenditures included significant purchases of gas and gift cards and rail passes. For example, various amounts spent on individual purchases included $11,587, $16,773, and $47,801. These amounts are in addition to the questioned costs above. There were invoices for cards and passes that indicated they were sent to the Program Manager’s home address under his name and a related business name. There are no written control procedures for these purchases and no inventory is maintained of the supply on hand at any given time. Also, there no records supporting how the cards were distributed. On the related invoices for these purchases, there is insufficient documentation including no program names or purpose. Recommendation: All employees in the Finance Department and associated with any federal program must be adequately trained in overall federal regulations and guidance as well as other requirements associated with each federal award. All such employees must read the grant-related policies and procedures manual (to be developed) and accounting manual with the code of conduct. In addition, each month, finance should compare grant expenditures posted to the general ledger to the monthly grant reports and budgets. Management’s Response: Impact has experienced staff turnover which resulted in process challenges. Nevertheless, Impact will take this recommendation and implement revised procedures to ensure that the Finance Department and other pertinent Impact resources receive federal regulations and guidance training, incorporate available systems and technology capabilities available from the technology service providers, and adopt best practices. Finance will schedule regular grant reviews, inclusive of program expenditures. These improvements will be in place by March 31, 2025.
Significant Deficiency – Item 2023-002 – Insufficient Required Substantiating Documentation for Major Programs Condition: Several expenditures and reports were selected for substantive, controls, and compliance testing from the financial records for the major programs. In several cases, the source documents supporting the federal expenditures reported were not accurate, missing and/or properly described. For expenditures allocated between award programs benefitted there was no written allocation methodology used including how costs were calculated and charged to each program. Federal regulations required that all federal expenditures must be supported by adequate source documents and accounting and cost records. Documentation must stipulate the nature of the expenditure (exactly what the funds were spent on), the purpose of the cost, the applicable federal program name, the cost for each product and service that agrees with the financial records and report to the federal funding source. In addition, PCCD provides to all related providers their “Financial and Administrative Guide for Grants” that clearly stipulates the nature of all substantiating documentation and reporting for all federal expenditures. Several expenditures tested included evidence of accounting system-generated approvals. In several cases, the person purchasing products and services also approved the expenditure. Along with that approval, there was another approval by the CFO, but the sign off showed that name as “Inactive”. For one of the PCCD contracts with subrecipients, periodically the Organization provides advances. However there is no accounting for use of the advances, and unused balances at period end are not reported on the financial statements. There are very explicit federal guidelines for time and effort accounting and reporting. Testing revealed discrepancies between individual’s time records, the payroll and check registers, posting to the general ledger, and the periodic reports to funders. In certain cases, the HR Supervisor approved hours included in timesheets that were not accurate. The time sheet hours exceeded the amount subsequently paid to the individual. Reconciliation of differences was a difficult process and the end result was a remaining difference not explained. Some timesheets for the program manager showed every posting was labelled with the wrong federal program name. Criteria: All expenditures charged to federal programs must be clearly and completely supported by required documentation that agrees with amounts in the Organization’s general ledger and periodic reports to the federal grantor. Cause: The Organization does not maintain written policies and procedures for procurement and reporting related to all financial transactions under federally-funded programs, including allowable costs and other federal compliance requirements. Procurement policies must adhere to the “Uniform Administrative Requirements, Cost Principles and Audit Requirements” for federal awards in 2CFR200.318 through 200.326. There is no formal Accounting Manual that is periodically revised when new grants are awarded or when the personnel pool changes. The written document must include a code of conduct for the Organization. When a new federal award is granted to the Organization with specific financial and administrative requirements, the manual should be revised to incorporate those requirements. The Organization has also experienced turnover of key personnel in the Finance Department. Effect: Several expenditures selected for testing were not properly documented in accordance with federal regulations. In several cases, the only supporting documentation was adjusting journal entries posted to the general ledger. In one case, an amount of $5,200 was posted to the general ledger under “Other Supportive Services”, but the Organization could not provide a copy of the adjusting entry nor any related documentation or explanation. In July 2022, costs totaling $5,500 were recorded that were related to expenses incurred in June 2022. The result of these deficiencies may be misstatement of costs that are periodically reported for reimbursement by the funder. Questioned Costs: The total estimated questioned costs for both major programs was $19,451. Certain tested expenditures included significant purchases of gas and gift cards and rail passes. For example, various amounts spent on individual purchases included $11,587, $16,773, and $47,801. These amounts are in addition to the questioned costs above. There were invoices for cards and passes that indicated they were sent to the Program Manager’s home address under his name and a related business name. There are no written control procedures for these purchases and no inventory is maintained of the supply on hand at any given time. Also, there no records supporting how the cards were distributed. On the related invoices for these purchases, there is insufficient documentation including no program names or purpose. Recommendation: All employees in the Finance Department and associated with any federal program must be adequately trained in overall federal regulations and guidance as well as other requirements associated with each federal award. All such employees must read the grant-related policies and procedures manual (to be developed) and accounting manual with the code of conduct. In addition, each month, finance should compare grant expenditures posted to the general ledger to the monthly grant reports and budgets. Management’s Response: Impact has experienced staff turnover which resulted in process challenges. Nevertheless, Impact will take this recommendation and implement revised procedures to ensure that the Finance Department and other pertinent Impact resources receive federal regulations and guidance training, incorporate available systems and technology capabilities available from the technology service providers, and adopt best practices. Finance will schedule regular grant reviews, inclusive of program expenditures. These improvements will be in place by March 31, 2025.
Significant Deficiency – Item 2023-002 – Insufficient Required Substantiating Documentation for Major Programs Condition: Several expenditures and reports were selected for substantive, controls, and compliance testing from the financial records for the major programs. In several cases, the source documents supporting the federal expenditures reported were not accurate, missing and/or properly described. For expenditures allocated between award programs benefitted there was no written allocation methodology used including how costs were calculated and charged to each program. Federal regulations required that all federal expenditures must be supported by adequate source documents and accounting and cost records. Documentation must stipulate the nature of the expenditure (exactly what the funds were spent on), the purpose of the cost, the applicable federal program name, the cost for each product and service that agrees with the financial records and report to the federal funding source. In addition, PCCD provides to all related providers their “Financial and Administrative Guide for Grants” that clearly stipulates the nature of all substantiating documentation and reporting for all federal expenditures. Several expenditures tested included evidence of accounting system-generated approvals. In several cases, the person purchasing products and services also approved the expenditure. Along with that approval, there was another approval by the CFO, but the sign off showed that name as “Inactive”. For one of the PCCD contracts with subrecipients, periodically the Organization provides advances. However there is no accounting for use of the advances, and unused balances at period end are not reported on the financial statements. There are very explicit federal guidelines for time and effort accounting and reporting. Testing revealed discrepancies between individual’s time records, the payroll and check registers, posting to the general ledger, and the periodic reports to funders. In certain cases, the HR Supervisor approved hours included in timesheets that were not accurate. The time sheet hours exceeded the amount subsequently paid to the individual. Reconciliation of differences was a difficult process and the end result was a remaining difference not explained. Some timesheets for the program manager showed every posting was labelled with the wrong federal program name. Criteria: All expenditures charged to federal programs must be clearly and completely supported by required documentation that agrees with amounts in the Organization’s general ledger and periodic reports to the federal grantor. Cause: The Organization does not maintain written policies and procedures for procurement and reporting related to all financial transactions under federally-funded programs, including allowable costs and other federal compliance requirements. Procurement policies must adhere to the “Uniform Administrative Requirements, Cost Principles and Audit Requirements” for federal awards in 2CFR200.318 through 200.326. There is no formal Accounting Manual that is periodically revised when new grants are awarded or when the personnel pool changes. The written document must include a code of conduct for the Organization. When a new federal award is granted to the Organization with specific financial and administrative requirements, the manual should be revised to incorporate those requirements. The Organization has also experienced turnover of key personnel in the Finance Department. Effect: Several expenditures selected for testing were not properly documented in accordance with federal regulations. In several cases, the only supporting documentation was adjusting journal entries posted to the general ledger. In one case, an amount of $5,200 was posted to the general ledger under “Other Supportive Services”, but the Organization could not provide a copy of the adjusting entry nor any related documentation or explanation. In July 2022, costs totaling $5,500 were recorded that were related to expenses incurred in June 2022. The result of these deficiencies may be misstatement of costs that are periodically reported for reimbursement by the funder. Questioned Costs: The total estimated questioned costs for both major programs was $19,451. Certain tested expenditures included significant purchases of gas and gift cards and rail passes. For example, various amounts spent on individual purchases included $11,587, $16,773, and $47,801. These amounts are in addition to the questioned costs above. There were invoices for cards and passes that indicated they were sent to the Program Manager’s home address under his name and a related business name. There are no written control procedures for these purchases and no inventory is maintained of the supply on hand at any given time. Also, there no records supporting how the cards were distributed. On the related invoices for these purchases, there is insufficient documentation including no program names or purpose. Recommendation: All employees in the Finance Department and associated with any federal program must be adequately trained in overall federal regulations and guidance as well as other requirements associated with each federal award. All such employees must read the grant-related policies and procedures manual (to be developed) and accounting manual with the code of conduct. In addition, each month, finance should compare grant expenditures posted to the general ledger to the monthly grant reports and budgets. Management’s Response: Impact has experienced staff turnover which resulted in process challenges. Nevertheless, Impact will take this recommendation and implement revised procedures to ensure that the Finance Department and other pertinent Impact resources receive federal regulations and guidance training, incorporate available systems and technology capabilities available from the technology service providers, and adopt best practices. Finance will schedule regular grant reviews, inclusive of program expenditures. These improvements will be in place by March 31, 2025.
Condition: The Organization’s written policies and procedures related to financial management and procurement do not meet the requirements of 2 CFR 200, Subpart D and Subpart E. Criteria: According to 2 CFR Section 200.302.b and 2 CFR Section 200.305 of the Uniform Guidance, the Organization is required to have a written financial management policy. Additionally, according to 2 CFR Section 200.317 – 200.326, the Organization is required to have a written procurement policy. Cause: The Organization was unaware of requirements regarding policies and procedures outlined in the Uniform Guidance. Effect: Written policies necessary for non-Federal entities receiving federal funds were not in place. Repeat Finding: No Questioned Costs: None reported Recommendation: We recommend that the Organization update their written policies and procedures that meet the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Views of Responsible Officials and Planned Corrective Action: We concur with the auditor’s finding and will update the Organization’s written policies and procedures for the Uniform Guidance requirements.
Condition: The Organization’s written policies and procedures related to financial management and procurement do not meet the requirements of 2 CFR 200, Subpart D and Subpart E. Criteria: According to 2 CFR Section 200.302.b and 2 CFR Section 200.305 of the Uniform Guidance, the Organization is required to have a written financial management policy. Additionally, according to 2 CFR Section 200.317 – 200.326, the Organization is required to have a written procurement policy. Cause: The Organization was unaware of requirements regarding policies and procedures outlined in the Uniform Guidance. Effect: Written policies necessary for non-Federal entities receiving federal funds were not in place. Repeat Finding: No Questioned Costs: None reported Recommendation: We recommend that the Organization update their written policies and procedures that meet the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Views of Responsible Officials and Planned Corrective Action: We concur with the auditor’s finding and will update the Organization’s written policies and procedures for the Uniform Guidance requirements.
Condition: The Organization’s written policies and procedures related to financial management and procurement do not meet the requirements of 2 CFR 200, Subpart D and Subpart E. Criteria: According to 2 CFR Section 200.302.b and 2 CFR Section 200.305 of the Uniform Guidance, the Organization is required to have a written financial management policy. Additionally, according to 2 CFR Section 200.317 – 200.326, the Organization is required to have a written procurement policy. Cause: The Organization was unaware of requirements regarding policies and procedures outlined in the Uniform Guidance. Effect: Written policies necessary for non-Federal entities receiving federal funds were not in place. Repeat Finding: No Questioned Costs: None reported Recommendation: We recommend that the Organization update their written policies and procedures that meet the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Views of Responsible Officials and Planned Corrective Action: We concur with the auditor’s finding and will update the Organization’s written policies and procedures for the Uniform Guidance requirements.
Federal Agency: Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555 Federal Award Identification Number and Year: 12060-SDE64370-20560 Pass-Through Agency: State Department of Education Pass-Through Number(s): N/A Award Period: 7/1/2022 - 6/30/2023 Type of Finding: -Significant Deficiency in Internal Control over Compliance -Other Matters (Noncompliance) Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement standards. Condition: The Board of Education’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned Costs: None noted. Context: Although the Board of Education did not have a policy in place in conformity with the federal uniform guidance criteria, the Board of Education did follow their purchasing policies. Cause: The policy has not been updated to be in compliance with uniform guidance requirements. Effect: With the absence of a compliant policy, the Board of Education is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Board of Education review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and is in process of developing a formal policy.
Federal Agency: Department of the Treasury, Department of Agriculture and Department of Transportation Federal Program Name: American Rescue Plan Act, Child Nutrition Cluster, and Highway Planning and Construction Assistance Listing Number: 21.027,10.553/10.555, and 20.205 Federal Award Identification Number and Year: 12060-OPM20600-29669, 12060-SDE64370-20560 and 12062-DOT57191-22108 Pass-Through Agency: Office of Policy and Management and State Department of Education and State Department of Transportation Pass-Through Number(s): N/A Award Period: 7/1/2022 - 6/30/2023 Type of Finding: -Significant Deficiency in Internal Control over Compliance -Other Matters (Noncompliance) Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement standards. Condition: The Board of Education’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned Costs: None noted. Context: Although the Board of Education did not have a policy in place in conformity with the federal uniform guidance criteria, the Board of Education did follow their purchasing policies. Cause: The policy has not been updated to be in compliance with uniform guidance requirements. Effect: With the absence of a compliant policy, the Board of Education is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Board of Education review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and is in process of developing a formal policy.
Federal Agency: Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555 Federal Award Identification Number and Year: 12060-SDE64370-20560 Pass-Through Agency: State Department of Education Pass-Through Number(s): N/A Award Period: 7/1/2022 - 6/30/2023 Type of Finding: -Significant Deficiency in Internal Control over Compliance -Other Matters (Noncompliance) Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement standards. Condition: The Board of Education’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned Costs: None noted. Context: Although the Board of Education did not have a policy in place in conformity with the federal uniform guidance criteria, the Board of Education did follow their purchasing policies. Cause: The policy has not been updated to be in compliance with uniform guidance requirements. Effect: With the absence of a compliant policy, the Board of Education is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Board of Education review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and is in process of developing a formal policy.
Federal Agency: Department of the Treasury, Department of Agriculture and Department of Transportation Federal Program Name: American Rescue Plan Act, Child Nutrition Cluster, and Highway Planning and Construction Assistance Listing Number: 21.027,10.553/10.555, and 20.205 Federal Award Identification Number and Year: 12060-OPM20600-29669, 12060-SDE64370-20560 and 12062-DOT57191-22108 Pass-Through Agency: Office of Policy and Management and State Department of Education and State Department of Transportation Pass-Through Number(s): N/A Award Period: 7/1/2022 - 6/30/2023 Type of Finding: -Significant Deficiency in Internal Control over Compliance -Other Matters (Noncompliance) Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement standards. Condition: The Board of Education’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned Costs: None noted. Context: Although the Board of Education did not have a policy in place in conformity with the federal uniform guidance criteria, the Board of Education did follow their purchasing policies. Cause: The policy has not been updated to be in compliance with uniform guidance requirements. Effect: With the absence of a compliant policy, the Board of Education is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Board of Education review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and is in process of developing a formal policy.
Federal Agency: Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555 Federal Award Identification Number and Year: 12060-SDE64370-20560 Pass-Through Agency: State Department of Education Pass-Through Number(s): N/A Award Period: 7/1/2022 - 6/30/2023 Type of Finding: -Significant Deficiency in Internal Control over Compliance -Other Matters (Noncompliance) Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement standards. Condition: The Board of Education’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned Costs: None noted. Context: Although the Board of Education did not have a policy in place in conformity with the federal uniform guidance criteria, the Board of Education did follow their purchasing policies. Cause: The policy has not been updated to be in compliance with uniform guidance requirements. Effect: With the absence of a compliant policy, the Board of Education is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Board of Education review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and is in process of developing a formal policy.
Federal Agency: Department of the Treasury, Department of Agriculture and Department of Transportation Federal Program Name: American Rescue Plan Act, Child Nutrition Cluster, and Highway Planning and Construction Assistance Listing Number: 21.027,10.553/10.555, and 20.205 Federal Award Identification Number and Year: 12060-OPM20600-29669, 12060-SDE64370-20560 and 12062-DOT57191-22108 Pass-Through Agency: Office of Policy and Management and State Department of Education and State Department of Transportation Pass-Through Number(s): N/A Award Period: 7/1/2022 - 6/30/2023 Type of Finding: -Significant Deficiency in Internal Control over Compliance -Other Matters (Noncompliance) Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement standards. Condition: The Board of Education’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned Costs: None noted. Context: Although the Board of Education did not have a policy in place in conformity with the federal uniform guidance criteria, the Board of Education did follow their purchasing policies. Cause: The policy has not been updated to be in compliance with uniform guidance requirements. Effect: With the absence of a compliant policy, the Board of Education is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Board of Education review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and is in process of developing a formal policy.
Federal Agency: Department of the Treasury, Department of Agriculture and Department of Transportation Federal Program Name: American Rescue Plan Act, Child Nutrition Cluster, and Highway Planning and Construction Assistance Listing Number: 21.027,10.553/10.555, and 20.205 Federal Award Identification Number and Year: 12060-OPM20600-29669, 12060-SDE64370-20560 and 12062-DOT57191-22108 Pass-Through Agency: Office of Policy and Management and State Department of Education and State Department of Transportation Pass-Through Number(s): N/A Award Period: 7/1/2022 - 6/30/2023 Type of Finding: -Significant Deficiency in Internal Control over Compliance -Other Matters (Noncompliance) Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement standards. Condition: The Board of Education’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned Costs: None noted. Context: Although the Board of Education did not have a policy in place in conformity with the federal uniform guidance criteria, the Board of Education did follow their purchasing policies. Cause: The policy has not been updated to be in compliance with uniform guidance requirements. Effect: With the absence of a compliant policy, the Board of Education is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Board of Education review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and is in process of developing a formal policy.
Federal Agency: Department of the Treasury, Department of Agriculture and Department of Transportation Federal Program Name: American Rescue Plan Act, Child Nutrition Cluster, and Highway Planning and Construction Assistance Listing Number: 21.027,10.553/10.555, and 20.205 Federal Award Identification Number and Year: 12060-OPM20600-29669, 12060-SDE64370-20560 and 12062-DOT57191-22108 Pass-Through Agency: Office of Policy and Management and State Department of Education and State Department of Transportation Pass-Through Number(s): N/A Award Period: 7/1/2022 - 6/30/2023 Type of Finding: -Significant Deficiency in Internal Control over Compliance -Other Matters (Noncompliance) Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement standards. Condition: The Board of Education’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned Costs: None noted. Context: Although the Board of Education did not have a policy in place in conformity with the federal uniform guidance criteria, the Board of Education did follow their purchasing policies. Cause: The policy has not been updated to be in compliance with uniform guidance requirements. Effect: With the absence of a compliant policy, the Board of Education is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Board of Education review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and is in process of developing a formal policy.
Federal Agency: Department of the Treasury, Department of Agriculture and Department of Transportation Federal Program Name: American Rescue Plan Act, Child Nutrition Cluster, and Highway Planning and Construction Assistance Listing Number: 21.027,10.553/10.555, and 20.205 Federal Award Identification Number and Year: 12060-OPM20600-29669, 12060-SDE64370-20560 and 12062-DOT57191-22108 Pass-Through Agency: Office of Policy and Management and State Department of Education and State Department of Transportation Pass-Through Number(s): N/A Award Period: 7/1/2022 - 6/30/2023 Type of Finding: -Significant Deficiency in Internal Control over Compliance -Other Matters (Noncompliance) Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement standards. Condition: The Board of Education’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned Costs: None noted. Context: Although the Board of Education did not have a policy in place in conformity with the federal uniform guidance criteria, the Board of Education did follow their purchasing policies. Cause: The policy has not been updated to be in compliance with uniform guidance requirements. Effect: With the absence of a compliant policy, the Board of Education is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Board of Education review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and is in process of developing a formal policy.
Federal Agency: Department of the Treasury, Department of Agriculture and Department of Transportation Federal Program Name: American Rescue Plan Act, Child Nutrition Cluster, and Highway Planning and Construction Assistance Listing Number: 21.027,10.553/10.555, and 20.205 Federal Award Identification Number and Year: 12060-OPM20600-29669, 12060-SDE64370-20560 and 12062-DOT57191-22108 Pass-Through Agency: Office of Policy and Management and State Department of Education and State Department of Transportation Pass-Through Number(s): N/A Award Period: 7/1/2022 - 6/30/2023 Type of Finding: -Significant Deficiency in Internal Control over Compliance -Other Matters (Noncompliance) Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement standards. Condition: The Board of Education’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned Costs: None noted. Context: Although the Board of Education did not have a policy in place in conformity with the federal uniform guidance criteria, the Board of Education did follow their purchasing policies. Cause: The policy has not been updated to be in compliance with uniform guidance requirements. Effect: With the absence of a compliant policy, the Board of Education is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Board of Education review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and is in process of developing a formal policy.
Federal Agency: Department of the Treasury, Department of Agriculture and Department of Transportation Federal Program Name: American Rescue Plan Act, Child Nutrition Cluster, and Highway Planning and Construction Assistance Listing Number: 21.027,10.553/10.555, and 20.205 Federal Award Identification Number and Year: 12060-OPM20600-29669, 12060-SDE64370-20560 and 12062-DOT57191-22108 Pass-Through Agency: Office of Policy and Management and State Department of Education and State Department of Transportation Pass-Through Number(s): N/A Award Period: 7/1/2022 - 6/30/2023 Type of Finding: -Significant Deficiency in Internal Control over Compliance -Other Matters (Noncompliance) Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement standards. Condition: The Board of Education’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned Costs: None noted. Context: Although the Board of Education did not have a policy in place in conformity with the federal uniform guidance criteria, the Board of Education did follow their purchasing policies. Cause: The policy has not been updated to be in compliance with uniform guidance requirements. Effect: With the absence of a compliant policy, the Board of Education is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Board of Education review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and is in process of developing a formal policy.
Federal Agency: Department of the Treasury, Department of Agriculture and Department of Transportation Federal Program Name: American Rescue Plan Act, Child Nutrition Cluster, and Highway Planning and Construction Assistance Listing Number: 21.027,10.553/10.555, and 20.205 Federal Award Identification Number and Year: 12060-OPM20600-29669, 12060-SDE64370-20560 and 12062-DOT57191-22108 Pass-Through Agency: Office of Policy and Management and State Department of Education and State Department of Transportation Pass-Through Number(s): N/A Award Period: 7/1/2022 - 6/30/2023 Type of Finding: -Significant Deficiency in Internal Control over Compliance -Other Matters (Noncompliance) Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement standards. Condition: The Board of Education’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned Costs: None noted. Context: Although the Board of Education did not have a policy in place in conformity with the federal uniform guidance criteria, the Board of Education did follow their purchasing policies. Cause: The policy has not been updated to be in compliance with uniform guidance requirements. Effect: With the absence of a compliant policy, the Board of Education is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Board of Education review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and is in process of developing a formal policy.
Federal Agency: Department of the Treasury, Department of Agriculture and Department of Transportation Federal Program Name: American Rescue Plan Act, Child Nutrition Cluster, and Highway Planning and Construction Assistance Listing Number: 21.027,10.553/10.555, and 20.205 Federal Award Identification Number and Year: 12060-OPM20600-29669, 12060-SDE64370-20560 and 12062-DOT57191-22108 Pass-Through Agency: Office of Policy and Management and State Department of Education and State Department of Transportation Pass-Through Number(s): N/A Award Period: 7/1/2022 - 6/30/2023 Type of Finding: -Significant Deficiency in Internal Control over Compliance -Other Matters (Noncompliance) Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement standards. Condition: The Board of Education’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned Costs: None noted. Context: Although the Board of Education did not have a policy in place in conformity with the federal uniform guidance criteria, the Board of Education did follow their purchasing policies. Cause: The policy has not been updated to be in compliance with uniform guidance requirements. Effect: With the absence of a compliant policy, the Board of Education is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Board of Education review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and is in process of developing a formal policy.
Federal Agency: U.S. Department of Education Federal Program Name: Elementary and Secondary Education School Emergency Relief and Governors Emergency Education Relief Fund Assistance Listing Number: 84.425D & 84.425C Federal Award Identification Number and Year: 2021 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number(s): 2022-401253-DPI-ESSERFII-163 & 2022-401253-DPI-ESSERFIII-165 Award Period: March 13, 2020 through September 30, 2029 & July 1, 2020 through September 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or specific requirement: For contracts between federal award recipients and contracts that are subject to David-Bacon Act requirements, 29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(I)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions) and 2 CFR Part 176, Subpart C; and 2 CFR section 200.326 require the contractor or subcontractor submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). Condition: Both of the qualifying projects selected for testing for compliance with requirements of the Davis-Bacon Act for the submission of weekly certified payrolls by the contractor. The District did not obtain or review weekly payrolls for either contract subject to Davis-Bacon Act provisions. For both contracts certified payrolls were subsequently obtained supporting related weekly payroll. Questioned costs: None Context: The District entered into agreements during the fiscal year under audit for project that were below the scope the contractor and District require full contracts, which included establishing submission and monitoring requirements for weekly certified payrolls. As the District does not commonly entered into contracts subject to these requirements, policies and process in place did not address these requirements. Cause: The District did not design and implement controls to ensure weekly certified payrolls were completed by the contractor and submitted to the District contracts qualifying for Davis-Bacon Act provisions. Effect: Projects subject to compliance with provisions of the Davis-Bacon Act may not be in compliance with required provision for required weekly pay.. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend the District design and implement internal controls that ensure required documentation of weekly certified payrolls are obtained and reviewed for all contracts subject to compliance with Davis-Bacon Act. Views of responsible officials: There is no disagreement with the audit finding. Federal Program Name: Elementary and Secondary Education School Emergency Relief and Governors Emergency Education Relief Fund Assistance Listing Number: 84.425D & 84.425C Federal Award Identification Number and Year: 2021 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number(s): 2022-401253-DPI-ESSERFII-163 & 2022-401253-DPI-ESSERFIII-165 Award Period: March 13, 2020 through September 30, 2029 & July 1, 2020 through September 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or specific requirement: For contracts between federal award recipients and contracts that are subject to David-Bacon Act requirements, 29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(I)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions) and 2 CFR Part 176, Subpart C; and 2 CFR section 200.326 require the contractor or subcontractor submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). Condition: Both of the qualifying projects selected for testing for compliance with requirements of the Davis-Bacon Act for the submission of weekly certified payrolls by the contractor. The District did not obtain or review weekly payrolls for either contract subject to Davis-Bacon Act provisions. For both contracts certified payrolls were subsequently obtained supporting related weekly payroll. Questioned costs: None Context: The District entered into agreements during the fiscal year under audit for project that were below the scope the contractor and District require full contracts, which included establishing submission and monitoring requirements for weekly certified payrolls. As the District does not commonly entered into contracts subject to these requirements, policies and process in place did not address these requirements. Cause: The District did not design and implement controls to ensure weekly certified payrolls were completed by the contractor and submitted to the District contracts qualifying for Davis-Bacon Act provisions. Effect: Projects subject to compliance with provisions of the Davis-Bacon Act may not be in compliance with required provision for required weekly pay.. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend the District design and implement internal controls that ensure required documentation of weekly certified payrolls are obtained and reviewed for all contracts subject to compliance with Davis-Bacon Act. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Name: Elementary and Secondary Education School Emergency Relief and Governors Emergency Education Relief Fund Assistance Listing Number: 84.425D & 84.425C Federal Award Identification Number and Year: 2021 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number(s): 2022-401253-DPI-ESSERFII-163 & 2022-401253-DPI-ESSERFIII-165 Award Period: March 13, 2020 through September 30, 2029 & July 1, 2020 through September 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or specific requirement: For contracts between federal award recipients and contracts that are subject to David-Bacon Act requirements, 29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(I)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions) and 2 CFR Part 176, Subpart C; and 2 CFR section 200.326 require the contractor or subcontractor submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). Condition: Both of the qualifying projects selected for testing for compliance with requirements of the Davis-Bacon Act for the submission of weekly certified payrolls by the contractor. The District did not obtain or review weekly payrolls for either contract subject to Davis-Bacon Act provisions. For both contracts certified payrolls were subsequently obtained supporting related weekly payroll. Questioned costs: None Context: The District entered into agreements during the fiscal year under audit for project that were below the scope the contractor and District require full contracts, which included establishing submission and monitoring requirements for weekly certified payrolls. As the District does not commonly entered into contracts subject to these requirements, policies and process in place did not address these requirements. Cause: The District did not design and implement controls to ensure weekly certified payrolls were completed by the contractor and submitted to the District contracts qualifying for Davis-Bacon Act provisions. Effect: Projects subject to compliance with provisions of the Davis-Bacon Act may not be in compliance with required provision for required weekly pay.. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend the District design and implement internal controls that ensure required documentation of weekly certified payrolls are obtained and reviewed for all contracts subject to compliance with Davis-Bacon Act. Views of responsible officials: There is no disagreement with the audit finding. Federal Program Name: Elementary and Secondary Education School Emergency Relief and Governors Emergency Education Relief Fund Assistance Listing Number: 84.425D & 84.425C Federal Award Identification Number and Year: 2021 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number(s): 2022-401253-DPI-ESSERFII-163 & 2022-401253-DPI-ESSERFIII-165 Award Period: March 13, 2020 through September 30, 2029 & July 1, 2020 through September 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or specific requirement: For contracts between federal award recipients and contracts that are subject to David-Bacon Act requirements, 29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(I)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions) and 2 CFR Part 176, Subpart C; and 2 CFR section 200.326 require the contractor or subcontractor submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). Condition: Both of the qualifying projects selected for testing for compliance with requirements of the Davis-Bacon Act for the submission of weekly certified payrolls by the contractor. The District did not obtain or review weekly payrolls for either contract subject to Davis-Bacon Act provisions. For both contracts certified payrolls were subsequently obtained supporting related weekly payroll. Questioned costs: None Context: The District entered into agreements during the fiscal year under audit for project that were below the scope the contractor and District require full contracts, which included establishing submission and monitoring requirements for weekly certified payrolls. As the District does not commonly entered into contracts subject to these requirements, policies and process in place did not address these requirements. Cause: The District did not design and implement controls to ensure weekly certified payrolls were completed by the contractor and submitted to the District contracts qualifying for Davis-Bacon Act provisions. Effect: Projects subject to compliance with provisions of the Davis-Bacon Act may not be in compliance with required provision for required weekly pay.. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend the District design and implement internal controls that ensure required documentation of weekly certified payrolls are obtained and reviewed for all contracts subject to compliance with Davis-Bacon Act. Views of responsible officials: There is no disagreement with the audit finding.
U.S. Department of Treasury Federal Financial Assistance Listing 21.027 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension & Debarment Significant Deficiency in Internal Control over Compliance Criteria – The Uniform Guidance, Section 200.303 Internal Controls, requires the non-federal entity establish and maintain effective internal controls over federal awards that provide reasonable assurance that awards are being managed in compliance with federal statutes, regulations and the terms and conditions of the federal award. As described in the 2023 compliance supplement, Part 3 includes the requirements of uniform guidance and 2 CFR sections 200.317 through 200.326. We consider factors such as the County’s internal controls and the internal controls over compliance requirements and tests as prescribed in 2 CFR section 200.317 through 200.326. Condition – We selected 4 procurements during our review of overall grant activity for the year ended June 30, 2023. We noted the following in our testing: 1 of the 4 procurements tested was not purchased prior to publishing bids within the local newspaper as required by the County’s Procurement Policy. Cause – Due to insufficient controls over the procurement review process (documentation) the controls are not operating as designed (or not properly implemented to prevent, detect and correct errors timely). Effect – Failure to document the required procurement procedures of the grant may result in noncompliance with the County’s policy. Questioned Costs – None reported. Context/Sampling – A nonstatistical sample of 4 out of 18 expenditures subject to procurement requirements were selected for testing, which accounted for $320,725 of $1,131,449 total expenditures subject to procurement requirements. Repeat Finding from Prior Years – No. Recommendation – We recommend that the County review the procurement approval process to determine why the controls failed and to design and implement controls that will prevent, detect and correct this from occurring in the future. View of Responsible Officials – The County will be more diligent in following their procurement policy. The Finance Department and Grants Team will provide training and guidance to ensure all the other County Departments/Offices are aware of the requirements. Additionally, the upcoming move to a new financial system will lend itself to policy updates and business process updates to ensure this will be less likely to happen.
U.S. Department of Treasury Federal Financial Assistance Listing 21.027 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension & Debarment Significant Deficiency in Internal Control over Compliance Criteria – The Uniform Guidance, Section 200.303 Internal Controls, requires the non-federal entity establish and maintain effective internal controls over federal awards that provide reasonable assurance that awards are being managed in compliance with federal statutes, regulations and the terms and conditions of the federal award. As described in the 2023 compliance supplement, Part 3 includes the requirements of uniform guidance and 2 CFR sections 200.317 through 200.326. We consider factors such as the County’s internal controls and the internal controls over compliance requirements and tests as prescribed in 2 CFR section 200.317 through 200.326. Condition – We selected 4 procurements during our review of overall grant activity for the year ended June 30, 2023. We noted the following in our testing: 1 of the 4 procurements tested was not purchased prior to publishing bids within the local newspaper as required by the County’s Procurement Policy. Cause – Due to insufficient controls over the procurement review process (documentation) the controls are not operating as designed (or not properly implemented to prevent, detect and correct errors timely). Effect – Failure to document the required procurement procedures of the grant may result in noncompliance with the County’s policy. Questioned Costs – None reported. Context/Sampling – A nonstatistical sample of 4 out of 18 expenditures subject to procurement requirements were selected for testing, which accounted for $320,725 of $1,131,449 total expenditures subject to procurement requirements. Repeat Finding from Prior Years – No. Recommendation – We recommend that the County review the procurement approval process to determine why the controls failed and to design and implement controls that will prevent, detect and correct this from occurring in the future. View of Responsible Officials – The County will be more diligent in following their procurement policy. The Finance Department and Grants Team will provide training and guidance to ensure all the other County Departments/Offices are aware of the requirements. Additionally, the upcoming move to a new financial system will lend itself to policy updates and business process updates to ensure this will be less likely to happen.
U.S. Department of Treasury Federal Financial Assistance Listing 21.027 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension & Debarment Significant Deficiency in Internal Control over Compliance Criteria – The Uniform Guidance, Section 200.303 Internal Controls, requires the non-federal entity establish and maintain effective internal controls over federal awards that provide reasonable assurance that awards are being managed in compliance with federal statutes, regulations and the terms and conditions of the federal award. As described in the 2023 compliance supplement, Part 3 includes the requirements of uniform guidance and 2 CFR sections 200.317 through 200.326. We consider factors such as the County’s internal controls and the internal controls over compliance requirements and tests as prescribed in 2 CFR section 200.317 through 200.326. Condition – We selected 4 procurements during our review of overall grant activity for the year ended June 30, 2023. We noted the following in our testing: 1 of the 4 procurements tested was not purchased prior to publishing bids within the local newspaper as required by the County’s Procurement Policy. Cause – Due to insufficient controls over the procurement review process (documentation) the controls are not operating as designed (or not properly implemented to prevent, detect and correct errors timely). Effect – Failure to document the required procurement procedures of the grant may result in noncompliance with the County’s policy. Questioned Costs – None reported. Context/Sampling – A nonstatistical sample of 4 out of 18 expenditures subject to procurement requirements were selected for testing, which accounted for $320,725 of $1,131,449 total expenditures subject to procurement requirements. Repeat Finding from Prior Years – No. Recommendation – We recommend that the County review the procurement approval process to determine why the controls failed and to design and implement controls that will prevent, detect and correct this from occurring in the future. View of Responsible Officials – The County will be more diligent in following their procurement policy. The Finance Department and Grants Team will provide training and guidance to ensure all the other County Departments/Offices are aware of the requirements. Additionally, the upcoming move to a new financial system will lend itself to policy updates and business process updates to ensure this will be less likely to happen.
Finding 2023-003 – COVID 19 – Coronavirus State and Local Fiscal Recovery Fund - AL No. 21.027 U.S. Department of Treasury Noncompliance and Material Weakness Related to Internal Control over Compliance of the Major Program Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. As governmental subrecipients of states they are also required to use the same state procurement policies and procedures for federal funds as for non‐federal funds, the Town is required to follow Massachusetts General Laws, Chapter (MGL) 30(b). MGL 30(b) requires the solicitation of three written or oral quotes for procurements of supplies between $10,000 and $49,999 and sealed bids or proposals for procurements of supplies $50,000 and over. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. However, A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context: During fiscal year 2023, the Town did not comply with the required procurement policies and procedures in place as it related to one of the expenses charged to the major program. As the expense tested was for engineering services that would have been exempt under Massachusetts General Laws, Chapter (MGL) 30(b) (State Procurement Requirement), under federal statutes and procurement requirements for engineering services identified in 2 CFR Part 200, the Town would have been required to go out to bid for the services. Questioned Costs: $413,477.78. Cause: The noncompliance occurred because the organization mistakenly relied on Massachusetts Chapter 30B exemptions, which govern state and local procurements, and did not recognize the need to comply with the more stringent federal procurement requirements for federal fund usage. Staff members were not sufficiently aware of the specific requirements under 2 CFR Part 200 and the precedence of federal procurement regulations over state law in this context. Effect or Potential Effect: There is risk that amounts charged to the federal awards major program may not be in accordance with procurement, suspension, and debarment principles. Identification as a Repeat Finding: N/A Recommendation: The Town of Bellingham should address the nocompliance and material weakness in internal controls noted above in order to ensure that procurements are conducted in accordance with federal and state requirements. Management Response: We acknowledge the audit finding regarding our reliance on Massachusetts Chapter 30B exemptions for procurement involving federal funds. We understand that federal procurement regulations under 2 CFR Part 200 take precedence over state law and that we failed fully to comply with federal requirements for competitive bidding, sole-source justification, and documentation. We are committed to addressing this issue by reviewing our procurement policies to clearly differentiate between state and federal requirements, ensuring that federal standards govern all procurement involving federal funds. We will provide additional training to staff, implement stronger documentation procedures, and review past procurement to ensure full compliance moving forward.
Finding No. 2023-003 Procurement Federal Agency: U.S. Department of Agriculture; U.S. Department of Education; U.S. Department of the Treasury Federal Program Name: Child Nutrition Cluster; Special Education Cluster (IDEA); Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 10.CNC; 84.027/84.173; 21.027 Federal Award Identification Number and Year: 214RI306N1199 – 2023; H027A220054 – 2023; SLFRP4547 – 2021 Pass-Through Agency: RI Department of Elementary and Secondary Education, RI Department of Revenue Pass-Through Number(s): 2725-13202-301; 12060-OPM20600-29669 Award Period: 10/1/22-9/30/23; 7/1/22-6/30/23; 3/3/21-12/31/24 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement The Town and Coventry Public Schools must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (See the definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Condition The Town and Coventry Public Schools purchasing policies do not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs None Context Although the Town’s and Coventry Public Schools purchasing policies do not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 9 of 9 procurement transactions tested. Cause Management was not aware of the procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Effect The Town and Coventry Public Schools are at risk for noncompliance with Federal grants as it relates to procurement. Repeat Finding Yes, repeat of prior year finding 2022-007. Recommendation We recommend that the Town and Coventry Public Schools updates its procurement policy to include all elements identified in 2 CFR sections 200.303 and 200.318 through 200.326. Views of Responsible Officials Management agrees with this finding.
Finding No. 2023-003 Procurement Federal Agency: U.S. Department of Agriculture; U.S. Department of Education; U.S. Department of the Treasury Federal Program Name: Child Nutrition Cluster; Special Education Cluster (IDEA); Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 10.CNC; 84.027/84.173; 21.027 Federal Award Identification Number and Year: 214RI306N1199 – 2023; H027A220054 – 2023; SLFRP4547 – 2021 Pass-Through Agency: RI Department of Elementary and Secondary Education, RI Department of Revenue Pass-Through Number(s): 2725-13202-301; 12060-OPM20600-29669 Award Period: 10/1/22-9/30/23; 7/1/22-6/30/23; 3/3/21-12/31/24 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement The Town and Coventry Public Schools must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (See the definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Condition The Town and Coventry Public Schools purchasing policies do not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs None Context Although the Town’s and Coventry Public Schools purchasing policies do not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 9 of 9 procurement transactions tested. Cause Management was not aware of the procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Effect The Town and Coventry Public Schools are at risk for noncompliance with Federal grants as it relates to procurement. Repeat Finding Yes, repeat of prior year finding 2022-007. Recommendation We recommend that the Town and Coventry Public Schools updates its procurement policy to include all elements identified in 2 CFR sections 200.303 and 200.318 through 200.326. Views of Responsible Officials Management agrees with this finding.
Finding No. 2023-003 Procurement Federal Agency: U.S. Department of Agriculture; U.S. Department of Education; U.S. Department of the Treasury Federal Program Name: Child Nutrition Cluster; Special Education Cluster (IDEA); Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 10.CNC; 84.027/84.173; 21.027 Federal Award Identification Number and Year: 214RI306N1199 – 2023; H027A220054 – 2023; SLFRP4547 – 2021 Pass-Through Agency: RI Department of Elementary and Secondary Education, RI Department of Revenue Pass-Through Number(s): 2725-13202-301; 12060-OPM20600-29669 Award Period: 10/1/22-9/30/23; 7/1/22-6/30/23; 3/3/21-12/31/24 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement The Town and Coventry Public Schools must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (See the definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Condition The Town and Coventry Public Schools purchasing policies do not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs None Context Although the Town’s and Coventry Public Schools purchasing policies do not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 9 of 9 procurement transactions tested. Cause Management was not aware of the procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Effect The Town and Coventry Public Schools are at risk for noncompliance with Federal grants as it relates to procurement. Repeat Finding Yes, repeat of prior year finding 2022-007. Recommendation We recommend that the Town and Coventry Public Schools updates its procurement policy to include all elements identified in 2 CFR sections 200.303 and 200.318 through 200.326. Views of Responsible Officials Management agrees with this finding.
Federal Agency: U.S. Department of Education Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Numbers: 21.027 Federal Award Identification Number and Year: SLFRP2619, 2023 Pass-Through Agency: Minnesota Department of Education Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: Non-federal entities other than states must follow the procurement standards set out at c CFR sections 200.318 through 200.326. This includes utilizing one of the five allowable procurement methods, including small purchase guidelines for items over the micro-purchase threshold and sealed bids, competitive proposals, or noncompetitive proposals when items exceed the simplified acquisition threshold. In addition, the Uniform Guidance requires that the entity maintain records sufficient to detail the history of the procurement. Condition: During our testing of the District’s procurements within the State and Local Fiscal Recovery Funds program, it was noted that all three procurements tested did not have sufficient documentation recording the appropriate method and history of the transaction. Questioned Costs: None Context: The three procurements which were tested did not retain documentation detailing the procurement process or what quotes were obtained. Cause: Time pressure led to this requirement not being met. Effect: The District was not in compliance with the documentation requirements for procurement transactions as detailed in the Uniform Guidance. Repeat Finding: This is not a repeat finding from the prior year. Recommendation: We recommend that the District reviews its procedures and controls over procurement for the Coronavirus State and Local Fiscal Recovery Funds program to ensure it is following federal guidance and internal policies over the procurement process and documenting the appropriate method and history of the transaction. View of Responsible Official: There is no disagreement with the audit finding.
Finding 2023-007: Significant Deficiency, Procurement and Noncompliance Finding – Procurement – Internal Control over Procurement Assistance Listing Program Title and Number: Special Education Cluster (IDEA) 84.027 Federal Agency: Department of Education Pass-through Entity: N/A Award year: 2022 and 2023 Criteria or specific requirement: The City must follow procurement standards set out at 2 CFR sections 200.318 through 200.326. There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319. Condition: SPED/Grant Administration did not adhere to the Danbury Public Schools “Bids and Purchases-Competitive” procurement policies, that were compliant with Federal Part 3 compliance guidelines. The DPS had a procurement policy in place that was consistent with the standards of the aforementioned compliance sections; however, the City did not follow their own procurement policy requiring two quotes for a micro-purchase expenditure, three quotes for a small purchase expenditure and advertising for bids publicly for the large >$5,000 purchase expenditures. They only obtained one quote for each expenditure for micro and small purchases, and they did not use a public bid process for expenditures over $5,000. Cause: While the City has a formal policy around required bids, the thresholds had not been updated in several years and there was a lack of controls that ensured the City DPS procurement policy was being adhered to in order to be compliant with the compliance standards. Effect: Possible effects on the performance is centered around potentially not awarding the purchase to the lowest qualified bidder. Prevalence: Systemic in nature. Questioned Cost: None Repeat Finding: No Recommendation: We recommend that the City implement controls that require review of each expenditure to ensure the City obtained the adequate number of bids for each expenditure. Additionally, we recommend that the City update their procurement thresholds to be more consistent with the compliance thresholds. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-007: Significant Deficiency, Procurement and Noncompliance Finding – Procurement – Internal Control over Procurement Assistance Listing Program Title and Number: Special Education Cluster (IDEA) 84.027 Federal Agency: Department of Education Pass-through Entity: N/A Award year: 2022 and 2023 Criteria or specific requirement: The City must follow procurement standards set out at 2 CFR sections 200.318 through 200.326. There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319. Condition: SPED/Grant Administration did not adhere to the Danbury Public Schools “Bids and Purchases-Competitive” procurement policies, that were compliant with Federal Part 3 compliance guidelines. The DPS had a procurement policy in place that was consistent with the standards of the aforementioned compliance sections; however, the City did not follow their own procurement policy requiring two quotes for a micro-purchase expenditure, three quotes for a small purchase expenditure and advertising for bids publicly for the large >$5,000 purchase expenditures. They only obtained one quote for each expenditure for micro and small purchases, and they did not use a public bid process for expenditures over $5,000. Cause: While the City has a formal policy around required bids, the thresholds had not been updated in several years and there was a lack of controls that ensured the City DPS procurement policy was being adhered to in order to be compliant with the compliance standards. Effect: Possible effects on the performance is centered around potentially not awarding the purchase to the lowest qualified bidder. Prevalence: Systemic in nature. Questioned Cost: None Repeat Finding: No Recommendation: We recommend that the City implement controls that require review of each expenditure to ensure the City obtained the adequate number of bids for each expenditure. Additionally, we recommend that the City update their procurement thresholds to be more consistent with the compliance thresholds. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-007: Significant Deficiency, Procurement and Noncompliance Finding – Procurement – Internal Control over Procurement Assistance Listing Program Title and Number: Special Education Cluster (IDEA) 84.027 Federal Agency: Department of Education Pass-through Entity: N/A Award year: 2022 and 2023 Criteria or specific requirement: The City must follow procurement standards set out at 2 CFR sections 200.318 through 200.326. There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319. Condition: SPED/Grant Administration did not adhere to the Danbury Public Schools “Bids and Purchases-Competitive” procurement policies, that were compliant with Federal Part 3 compliance guidelines. The DPS had a procurement policy in place that was consistent with the standards of the aforementioned compliance sections; however, the City did not follow their own procurement policy requiring two quotes for a micro-purchase expenditure, three quotes for a small purchase expenditure and advertising for bids publicly for the large >$5,000 purchase expenditures. They only obtained one quote for each expenditure for micro and small purchases, and they did not use a public bid process for expenditures over $5,000. Cause: While the City has a formal policy around required bids, the thresholds had not been updated in several years and there was a lack of controls that ensured the City DPS procurement policy was being adhered to in order to be compliant with the compliance standards. Effect: Possible effects on the performance is centered around potentially not awarding the purchase to the lowest qualified bidder. Prevalence: Systemic in nature. Questioned Cost: None Repeat Finding: No Recommendation: We recommend that the City implement controls that require review of each expenditure to ensure the City obtained the adequate number of bids for each expenditure. Additionally, we recommend that the City update their procurement thresholds to be more consistent with the compliance thresholds. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-007: Significant Deficiency, Procurement and Noncompliance Finding – Procurement – Internal Control over Procurement Assistance Listing Program Title and Number: Special Education Cluster (IDEA) 84.027 Federal Agency: Department of Education Pass-through Entity: N/A Award year: 2022 and 2023 Criteria or specific requirement: The City must follow procurement standards set out at 2 CFR sections 200.318 through 200.326. There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319. Condition: SPED/Grant Administration did not adhere to the Danbury Public Schools “Bids and Purchases-Competitive” procurement policies, that were compliant with Federal Part 3 compliance guidelines. The DPS had a procurement policy in place that was consistent with the standards of the aforementioned compliance sections; however, the City did not follow their own procurement policy requiring two quotes for a micro-purchase expenditure, three quotes for a small purchase expenditure and advertising for bids publicly for the large >$5,000 purchase expenditures. They only obtained one quote for each expenditure for micro and small purchases, and they did not use a public bid process for expenditures over $5,000. Cause: While the City has a formal policy around required bids, the thresholds had not been updated in several years and there was a lack of controls that ensured the City DPS procurement policy was being adhered to in order to be compliant with the compliance standards. Effect: Possible effects on the performance is centered around potentially not awarding the purchase to the lowest qualified bidder. Prevalence: Systemic in nature. Questioned Cost: None Repeat Finding: No Recommendation: We recommend that the City implement controls that require review of each expenditure to ensure the City obtained the adequate number of bids for each expenditure. Additionally, we recommend that the City update their procurement thresholds to be more consistent with the compliance thresholds. Views of Responsible Officials: Management agrees with the finding.
Finding Reference 2023-05 Assistance Listing Number 20.205 Highway Planning and Construction (Federal-Aid Highway Program) Name of Federal Agency Department of Transportation Compliance Requirement Special Tests and Provisions – Wage Rate Requirements Type of Finding Significant Deficiency on Internal Control and Non-Compliance Condition: From a sample of fifteen work weeks examined, we noted that three certified payroll weeks were not certified within the required weekly period as required by federal regulations. The delays in certifications ranged from four days to thirty-three days in excess of the required weekly timeframe. Criteria: Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Cause: The delays in the certification of payroll weeks may be due to inefficient payroll processing procedures within the contractor or subcontractor's system. Effect: The failure to certify payrolls on a weekly basis as required by federal regulations can lead to noncompliance with federal regulations, specifically the Davis-Bacon Act and related Department of Labor (DOL) regulations. However, the fact that the Authority discharges its obligation by withholding payment to the contractor or subcontractor until the certified payroll is received and reviewed, mitigates all economic risks. Questioned Costs: None. Recommendation: To address the identified issues, the following corrective actions are recommended: • Enhance Oversight and Compliance Reviews: Designate a compliance officer or team responsible for verifying that certified payrolls are submitted timely. Include within the internal audit functions to test compliance with this requirement and recommend corrective actions promptly. • Request a non-compliance waiver from the FHWA: The Authority should request the FHWA for a 20% non-compliance waiver, as it is impracticable for the Authority to ascertain that all contractors or subcontractors comply timely with this requirement. Views of Responsible Officials Refer to Management’s unaudited corrective action plan. -
Finding 2023-001 – Special Education Cluster – AL No.’s 84.027 & 84.173 Department of Education Massachusetts Department of Elementary and Secondary Education Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Programs Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. As governmental subrecipients of states are also required to use the same state procurement policies and procedures for federal funds as for non‐federal funds, the Town is required to follow Massachusetts General Laws, Chapter (MGL) 30(b). MGL 30(b) requires the solicitation of three written or oral quotes for procurements of supplies between $10,000 and $49,999 and sealed bids or proposals for procurements of supplies $50,000 and over. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context: During fiscal year 2023, the Town did not comply with the required procurement policies and procedures process for procurements that exceeded both State and Federal thresholds. Questioned Costs: Unkown Cause: A Town State/Federal grants procedures manual that included proper procurement procedures did not exist until February 2023. Effect or Potential Effect: Due to the weaknesses in internal controls noted above, there is a risk that amounts charged to federal awards may not be in accordance with procurement, suspension, and debarment principles. No known questioned costs are reported, as it is not quantifiable. Identification as a Repeat Finding: Yes, finding number 2022-002 Recommendation: The Town should address the weaknesses in internal controls noted above in order to ensure that procurements are conducted in accordance with federal and state requirements. Managements Response: We acknowledge the audit finding related to non-compliance with the required procurement policies and procedures for procurements exceeding the State and Federal thresholds during Fiscal Year 2023. The Town and Schools have Acushnet’s Federal Grant Procedures Manual (February 2023) to ensure that procurements are conducted in accordance with Federal and State requirements – in particular, the procurement standards set out at 2 CFR sections 200.318 through 200.326. We are pleased to report that we believe to have addressed this issue in Fiscal Year 2024 to ensure compliance with the procurement policies and procedures, as required by both State and Federal thresholds
Finding 2023-001 – Special Education Cluster – AL No.’s 84.027 & 84.173 Department of Education Massachusetts Department of Elementary and Secondary Education Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Programs Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. As governmental subrecipients of states are also required to use the same state procurement policies and procedures for federal funds as for non‐federal funds, the Town is required to follow Massachusetts General Laws, Chapter (MGL) 30(b). MGL 30(b) requires the solicitation of three written or oral quotes for procurements of supplies between $10,000 and $49,999 and sealed bids or proposals for procurements of supplies $50,000 and over. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context: During fiscal year 2023, the Town did not comply with the required procurement policies and procedures process for procurements that exceeded both State and Federal thresholds. Questioned Costs: Unkown Cause: A Town State/Federal grants procedures manual that included proper procurement procedures did not exist until February 2023. Effect or Potential Effect: Due to the weaknesses in internal controls noted above, there is a risk that amounts charged to federal awards may not be in accordance with procurement, suspension, and debarment principles. No known questioned costs are reported, as it is not quantifiable. Identification as a Repeat Finding: Yes, finding number 2022-002 Recommendation: The Town should address the weaknesses in internal controls noted above in order to ensure that procurements are conducted in accordance with federal and state requirements. Managements Response: We acknowledge the audit finding related to non-compliance with the required procurement policies and procedures for procurements exceeding the State and Federal thresholds during Fiscal Year 2023. The Town and Schools have Acushnet’s Federal Grant Procedures Manual (February 2023) to ensure that procurements are conducted in accordance with Federal and State requirements – in particular, the procurement standards set out at 2 CFR sections 200.318 through 200.326. We are pleased to report that we believe to have addressed this issue in Fiscal Year 2024 to ensure compliance with the procurement policies and procedures, as required by both State and Federal thresholds
Finding 2023-003 – COVID 19 – Coronavirus State and Local Fiscal Recovery Fund - AL No. 21.027 U.S. Department of Treasury Noncompliance and Material Weakness Related to Internal Control over Compliance of the Major Program Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. As governmental subrecipients of states they are also required to use the same state procurement policies and procedures for federal funds as for non‐federal funds, the Town is required to follow Massachusetts General Laws, Chapter (MGL) 30(b). MGL 30(b) requires the solicitation of three written or oral quotes for procurements of supplies between $10,000 and $49,999 and sealed bids or proposals for procurements of supplies $50,000 and over. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. Condition: During fiscal year 2023, the Town could not provide evidence that they complied with the required procurement policies and procedures in place as it related to two of the expenses charged to the major program. Context: The Town purchased a new boiler for the School however the procurement documentation could not be located and the employee who would have overseen the project was unavailable to provide the supporting documentation. In addition, the Town could not locate or provide evidence that procurement procedures were followed when selecting an engineer for the Water Tank project. Questioned Costs: $71,500 related to the School Boiler Project and $170,163.70 related to the Water Tank Project. Cause: Directors used the Massachusetts procurement guidelines and not federal guidelines. Effect or Potential Effect: There is a risk that the amount charged to the federal awards major program may not be in accordance with procurement, suspension, and debarment principles. Identification as a Repeat Finding: N/A Recommendation: The Town of Hopedale should address the noncompliance and material weakness in internal controls noted above in order to ensure that procurements are conducted in accordance with federal and state requirements. Management Response: New procedures in place for documentation and reporting.
Suspension and Debarment Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster (Individuals with Disabilities Education Act) Federal Award Identification Number: Grant Year: 2023 Assistance Listing Number: 84.027 Pass-Through Agency: State of Connecticut Department of Education Pass-Through Number(s): 12060-SDE64370-20977 Award Period: June 7, 2022, through December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or Specific Requirement: The Board of Education must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance including the verification that an entity with which the Board of Education plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Condition: The Board of Education procurement policies do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Policies regarding verification of compliance with suspension and debarment requirements were not found. Client did not have adequate support for verification by management of vendor status for suspension or debarment. Questioned Costs: None Context: Per review of vendor agreements during testing over suspension and debarment, there was no indication of a suspension and debarment clause or verification of vendor status by management. Cause: The significant deficiency is primarily due to inadequate internal controls over the procurement process. Effect: With the absence of a compliant policy, the City could process transactions that do not follow federal Uniform Guidance procurement standards. Repeat Finding: No Recommendation: We recommend that management review and enhance the procedures over the procurement and purchasing process, to be sure that all federal grant expenditures and contracts with vendors are performed properly in accordance with the Uniform Guidance. Views of Responsible Officials: Management agrees with the auditors’ recommendations.
Suspension and Debarment Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster (Individuals with Disabilities Education Act) Federal Award Identification Number: Grant Year: 2023 Assistance Listing Number: 84.027 Pass-Through Agency: State of Connecticut Department of Education Pass-Through Number(s): 12060-SDE64370-20977 Award Period: June 7, 2022, through December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or Specific Requirement: The Board of Education must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance including the verification that an entity with which the Board of Education plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Condition: The Board of Education procurement policies do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Policies regarding verification of compliance with suspension and debarment requirements were not found. Client did not have adequate support for verification by management of vendor status for suspension or debarment. Questioned Costs: None Context: Per review of vendor agreements during testing over suspension and debarment, there was no indication of a suspension and debarment clause or verification of vendor status by management. Cause: The significant deficiency is primarily due to inadequate internal controls over the procurement process. Effect: With the absence of a compliant policy, the City could process transactions that do not follow federal Uniform Guidance procurement standards. Repeat Finding: No Recommendation: We recommend that management review and enhance the procedures over the procurement and purchasing process, to be sure that all federal grant expenditures and contracts with vendors are performed properly in accordance with the Uniform Guidance. Views of Responsible Officials: Management agrees with the auditors’ recommendations.
Suspension and Debarment Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster (Individuals with Disabilities Education Act) Federal Award Identification Number: Grant Year: 2023 Assistance Listing Number: 84.027 Pass-Through Agency: State of Connecticut Department of Education Pass-Through Number(s): 12060-SDE64370-20977 Award Period: June 7, 2022, through December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or Specific Requirement: The Board of Education must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance including the verification that an entity with which the Board of Education plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Condition: The Board of Education procurement policies do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Policies regarding verification of compliance with suspension and debarment requirements were not found. Client did not have adequate support for verification by management of vendor status for suspension or debarment. Questioned Costs: None Context: Per review of vendor agreements during testing over suspension and debarment, there was no indication of a suspension and debarment clause or verification of vendor status by management. Cause: The significant deficiency is primarily due to inadequate internal controls over the procurement process. Effect: With the absence of a compliant policy, the City could process transactions that do not follow federal Uniform Guidance procurement standards. Repeat Finding: No Recommendation: We recommend that management review and enhance the procedures over the procurement and purchasing process, to be sure that all federal grant expenditures and contracts with vendors are performed properly in accordance with the Uniform Guidance. Views of Responsible Officials: Management agrees with the auditors’ recommendations.
Federal Program Name: Research and Development Cluster Federal Agency: National Science Foundation Federal Assistance Listing Title and Number: 47.074 Award Year: June 1, 2022 – May 31, 2023 Criteria or Specific Requirement: Procurement, Suspension and Debarment Condition: The University’s procurement policy does not contain adequate documentation to demonstrate compliance with federal procurement regulations. (Deficiency) Questioned Costs: None. Context: The University’s documented procurement policies do not contain all the specified requirements of 2 CFR sections 200.318 through 200.326. Effect: The risks exist that the University could follow their procurement policy and procure an item with federal funds, which would not meet the federal procurement regulations. Cause: The writing of the policy did not take into account federal procurement regulations which are required to be incorporated for items procured with federal funds. Repeat Finding: Yes Recommendation: We recommend the University revise procurement policies to incorporate all required elements of federal procurement regulations. Views of Responsible Officials and Planned Corrective Action: The University agrees with the finding, a revised policy has been drafted and was approved in September 2023.
Federal Program Name: Research and Development Cluster Federal Agency: National Science Foundation Federal Assistance Listing Title and Number: 47.074 Award Year: June 1, 2022 – May 31, 2023 Criteria or Specific Requirement: Procurement, Suspension and Debarment Condition: The University’s procurement policy does not contain adequate documentation to demonstrate compliance with federal procurement regulations. (Deficiency) Questioned Costs: None. Context: The University’s documented procurement policies do not contain all the specified requirements of 2 CFR sections 200.318 through 200.326. Effect: The risks exist that the University could follow their procurement policy and procure an item with federal funds, which would not meet the federal procurement regulations. Cause: The writing of the policy did not take into account federal procurement regulations which are required to be incorporated for items procured with federal funds. Repeat Finding: Yes Recommendation: We recommend the University revise procurement policies to incorporate all required elements of federal procurement regulations. Views of Responsible Officials and Planned Corrective Action: The University agrees with the finding, a revised policy has been drafted and was approved in September 2023.
Finding 2023-004 (Material Weakness) Program: Choice Neighborhoods Implementation Grants Federal Agency: Department of Housing and Urban Development (HUD) AL #: 14.889 Federal Award Identification Number and Year: Various - See SEFA Pass-through Entity: N/A Type of Compliance Finding: I) Procurement, Suspension & 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 sections 200.318 through 200.326. They must use their own documented procurement procedures which reflect applicable state and local laws and regulation, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200 and they must not be suspended or debarred. Condition/Context The City did not provide evidence supporting the City's compliance with this requirement. Cause The City did not follow their internal control processes and procedures. Effect The failure of the City to adhere to all Choice Neighborhoods Implementation Grants requirements could result in the repayment of grant funds. Questioned Costs Unknown Is the finding a repeat finding No Recommendations We recommend that the City submit/provide all required documentation to meet compliance requirements. Views of Responsible Officials/Planned Corrective Actions Management agrees with the finding. See Corrective Action Plan on Organization's letterhead.
Finding 2023-005 (Material Weakness) Program: Choice Neighborhoods Implementation Grants Federal Agency: Department of Housing an Urban Development (HUD) AL #: 14.889 Federal Award Identification Number and Year: Various - See SEFA Pass-through Entity: N/A Type of Compliance Finding: N) Special Tests and Provisions Criteria All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141-3144, 3146, and 3147). Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR Sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition/Context The City did not provide evidence supporting the City's compliance with this requirement. Cause The City did not follow their internal control processes and procedures. Effect The failure of the City to adhere to all Choice Neighborhoods Implementation Grants requirements could result in the repayment of grant funds. Questioned Costs Unknown Is the finding a repeat finding No Recommendations We recommend that the City submit/provide all required documentation to meet compliance requirements. Views of Responsible Officials/Planned Corrective Actions Management agrees with the finding. See Corrective Action Plan on Organization's letterhead.
Finding 2023-004 (Material Weakness) Program: Choice Neighborhoods Implementation Grants Federal Agency: Department of Housing and Urban Development (HUD) AL #: 14.889 Federal Award Identification Number and Year: Various - See SEFA Pass-through Entity: N/A Type of Compliance Finding: I) Procurement, Suspension & 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 sections 200.318 through 200.326. They must use their own documented procurement procedures which reflect applicable state and local laws and regulation, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200 and they must not be suspended or debarred. Condition/Context The City did not provide evidence supporting the City's compliance with this requirement. Cause The City did not follow their internal control processes and procedures. Effect The failure of the City to adhere to all Choice Neighborhoods Implementation Grants requirements could result in the repayment of grant funds. Questioned Costs Unknown Is the finding a repeat finding No Recommendations We recommend that the City submit/provide all required documentation to meet compliance requirements. Views of Responsible Officials/Planned Corrective Actions Management agrees with the finding. See Corrective Action Plan on Organization's letterhead.
Finding 2023-005 (Material Weakness) Program: Choice Neighborhoods Implementation Grants Federal Agency: Department of Housing an Urban Development (HUD) AL #: 14.889 Federal Award Identification Number and Year: Various - See SEFA Pass-through Entity: N/A Type of Compliance Finding: N) Special Tests and Provisions Criteria All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141-3144, 3146, and 3147). Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR Sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition/Context The City did not provide evidence supporting the City's compliance with this requirement. Cause The City did not follow their internal control processes and procedures. Effect The failure of the City to adhere to all Choice Neighborhoods Implementation Grants requirements could result in the repayment of grant funds. Questioned Costs Unknown Is the finding a repeat finding No Recommendations We recommend that the City submit/provide all required documentation to meet compliance requirements. Views of Responsible Officials/Planned Corrective Actions Management agrees with the finding. See Corrective Action Plan on Organization's letterhead.
U.S. Department of the Treasury State of New Jersey Department of Community Affairs COVID-19 Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal Award Number and Years: G2022-09 (03/02/2021 – 12/31/2024) Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample Repeat Finding: No Finding Type: Material Weakness, Material Non-compliance Criteria Reporting Per 2 CFR 200.502, the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants. Further, the Uniform Guidance compliance supplement notes, each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the federal awarding agency. Also, in accordance with the grant agreement and the reporting requirements for the State of New Jersey Department of Community Affairs, direct grants and pass-through funds are fulfilled utilizing an advanced payment method and tracking reports. The grantee shall submit quarterly financial reports, in a format to be provided by the Department, and including the number of government full-time employees responding to COVID-19 as supported by this funding. The reports are prepared and submitted to allow for relevant and reliable information to be provided to the Federal government or State of New Jersey for tracking purposes. The reports are the source documents for the grantee to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the grantee’s financial statements in accordance with 2 CFR 200.502, Basis for determining Federal awards expended, for the SEFA. Procurement Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). In accordance with the grant agreement and the reporting requirements for the State of New Jersey Department of Community Affairs, recipients may use award funds to enter into contracts to procure goods and services necessary to implement one or more of the eligible purposes outlined in sections 602(c) and 603(c) of the Act and Treasury’s Interim Final Rule and Final Rule. As such, recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance. Under the program, St. Joseph’s Health, Inc. must follow the procurement standards in 2 CFR sections 200.318 through 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. Additionally, in accordance with Federal requirements, a non-Federal entity shall maintain internal controls over Federal programs designed to provide reasonable assurance that transactions are executed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award that could have a direct and material effect on a Federal program. Condition and Context Reporting On a quarterly basis, St. Joseph’s Health, Inc. (the System) prepares and reports to the State of New Jersey Department of Community Affairs (the Department) the program expenditures for Federal funding amounts on the tracking report of expenditures, which are then used to prepare the annual SEFA in conjunction with the general ledger detail at the end of the fiscal year. While the expenditures per the SEFA as prepared by the System was accurate and the quarterly reporting was accepted by the State, the System’s expenditures per the report of expenditures were based upon purchase order amounts, which includes expenditures that were incurred subsequent to year-end. Procurement The System has procurement policies and guidelines that are in accordance with the respective provisions of the Uniform Guidance. The System contracted with multiple vendors for several projects under the G2022-09 grant that were above the micro purchase threshold of $10,000, but below the simplified acquisition threshold of $250,000. However, the System did not obtain multiple quotes from different vendors to encourage fair competition in the market as per the System’s prescribed procurement policies and guidelines. The vendors were not suspended or debarred and the associated expenditures with these vendors incurred in fiscal year 2022 were determined to be allowable. The System’s policies and procedures to ensure compliance with the above compliance requirements did not include certain internal controls that were designed properly and operating effectively to ensure that the System’s report of expenditures submitted to the Department includes a reconciliation between incurred expenditures and purchase order balances or obtained the necessary quotes from potential bidders for procurements over the micro purchase threshold. Cause Management’s review of the submitted tracking report of expenditures did not identify the need for a reconciliation of incurred expenditures and purchase order balances reported to the Department and as such, as there is a variance between the amounts reported on the SEFA and the amounts reported to the Department on the quarterly reports of approximately $2.2 million. Additionally, they System did not retain or obtain the required documentation for procurements entered into with vendors for the grant in accordance with the System’s procurement policies and guidelines. Effect The System had a material variance in the amount of expenditures reported to the Department as compared to the SEFA, as well as did not comply with Federal regulations or its own policies and guidelines for procurement transactions and related document retention. Questioned costs None Recommendation Reporting We recommend that the System strengthen its processes and internal controls to ensure the tracking report of expenditures provided to the Department has a reconciliation of the amount of expenditures incurred in the period based upon the general ledger and accounting records, used to prepare the annual SEFA, as compared to the purchase order balances. Procurement We recommend that the System strengthen its processes and internal controls to ensure the System obtains and retains the required documentation for each procurement based upon the type of procurement and dollar thresholds. View of Responsible Official Management agrees with the auditor’s recommendation and will strengthen its processes and internal controls to ensure the report of expenditures provided to the Department has a reconciliation of the amount of expenditures incurred in the period compared to the purchase order balances. In addition, Management will strengthen its processes and internal controls to ensure the System obtains and retains the required documentation for each procurement based upon the type of procurement and dollar thresholds.
Finding Number: 2022‐001 Repeat Finding: No Program Name/Assistance Listing Title: COVID‐19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Agency: U.S. Department of Treasury Federal Award Number: ISA‐ARPA‐AZABGC‐042022‐47, GR‐GEER‐AZABGC‐040122‐01 Pass‐Through Agency: Arizona Alliance of Boys and Girls Clubs Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement and Suspension and Debarment Criteria Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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. Additionally, non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non‐federal entity enters into a covered transaction with an entity at a lower tier, the non‐federal entity must verify that the entity, as defined in 2 CFR §180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System of Award Management (SAM) maintained by the General Services Administration (GSA) or (2) collecting a certification from the entity, or adding a clause or condition to the covered transaction with that entity (2 CFR §180.300). Condition The Club did not have proper internal controls over procurement to ensure compliance with federal regulations and guidelines. Adequate supporting documentation was not maintained to demonstrate compliance with procurement standards. In addition, the Club’s written procurement standards did not align with federal regulations and guidelines. Cause The Club’s internal controls over procurement of goods and services were not adequate. Effect The Club was not in compliance with Federal regulations and guidelines related to procurement. Context During our review of procurement, we noted the following: - The Club does not have a policy or procedure in place that requires a verification check of suspension and debarment for covered transactions. One purchase charged to the program exceeded $25,000; however, the Club did not perform a verification check. Audit procedures determined the vendor was not suspended or debarred. - The Club’s procurement policies did not address §200.321 Contracting with small and minority businesses, women's business enterprises, and labor surplus area firms or §200.322 Domestic preferences for procurements. - For purchases with two vendors exceeding the micro‐purchase threshold but less than the Simplified Acquisition Threshold, the Club did not maintain records sufficient to detail the procurement performed for these vendors. The sample was not intended to be, and was not, a statistically valid sample Recommendation The Club should develop and implement policies and procedures to ensure compliance with federal procurement requirements. Additionally, procurement records should be retained, and should 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. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2022‐001 Repeat Finding: No Program Name/Assistance Listing Title: COVID‐19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Agency: U.S. Department of Treasury Federal Award Number: ISA‐ARPA‐AZABGC‐042022‐47, GR‐GEER‐AZABGC‐040122‐01 Pass‐Through Agency: Arizona Alliance of Boys and Girls Clubs Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement and Suspension and Debarment Criteria Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. 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. Additionally, non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non‐federal entity enters into a covered transaction with an entity at a lower tier, the non‐federal entity must verify that the entity, as defined in 2 CFR §180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System of Award Management (SAM) maintained by the General Services Administration (GSA) or (2) collecting a certification from the entity, or adding a clause or condition to the covered transaction with that entity (2 CFR §180.300). Condition The Club did not have proper internal controls over procurement to ensure compliance with federal regulations and guidelines. Adequate supporting documentation was not maintained to demonstrate compliance with procurement standards. In addition, the Club’s written procurement standards did not align with federal regulations and guidelines. Cause The Club’s internal controls over procurement of goods and services were not adequate. Effect The Club was not in compliance with Federal regulations and guidelines related to procurement. Context During our review of procurement, we noted the following: - The Club does not have a policy or procedure in place that requires a verification check of suspension and debarment for covered transactions. One purchase charged to the program exceeded $25,000; however, the Club did not perform a verification check. Audit procedures determined the vendor was not suspended or debarred. - The Club’s procurement policies did not address §200.321 Contracting with small and minority businesses, women's business enterprises, and labor surplus area firms or §200.322 Domestic preferences for procurements. - For purchases with two vendors exceeding the micro‐purchase threshold but less than the Simplified Acquisition Threshold, the Club did not maintain records sufficient to detail the procurement performed for these vendors. The sample was not intended to be, and was not, a statistically valid sample Recommendation The Club should develop and implement policies and procedures to ensure compliance with federal procurement requirements. Additionally, procurement records should be retained, and should 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. Views of Responsible Officials See Corrective Action Plan.
Management’s Response: The Home will update its purchasing policy to ensure the procurement standards in 2 CFR 200.317 – 200.326 are incorporated.