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.
2022-001 Procurement, Suspension and Debarment ALN Number Name of Federal Program 10.760 Water and Waste Disposal Systems Identification as a Repeat Finding: Repeat of Finding 2021-001 Finding: The Association did not have a written procurement policy that complies with the procurement standards established in 2 CFR sections 200.318 through 200.326 in place for the full compliance year. Criteria: Non-Federal entities other than 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 200. Condition and context: Sallal Water Association adopted a procurement policy for goods and service providers that complies with federal procurement standards in December 2022. As such, it was non-compliant with the federal standards for 11 months of the compliance year. Sample size and population: Sampling was not applicable to this finding. Effect: The result of the finding is that Sallal Water Association is not in compliance with federal procurement standards for 11 months of the compliance year. Recommendation: None as the Association adopted a written procurement policy in December 2022. Question Costs: None Management Response and Corrective Action Plan: See Corrective Action Plan Contact Person: Kristina Parker, Director of Finance and Operations
2022-005 Finding Federal Program Coronavirus State and Local Fiscal Recovery Funds (21.027) Federal Award Number and Year ? SLFRP2882, 2021 Procurement, Suspension, and Debarment Material Weakness Criteria Uniform Guidance requires all non-federal entities, other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. Non-federal entities are also prohibited from entering into a covered transaction equal to or exceeding $25,000 with a vendor who has been suspended or disbarred from receiving federal funds. Condition We noted during testing procurement, suspension, and debarment that the County doesn?t have a procurement policy that follows Uniform Guidance. We also noted during testing for suspension and debarment that 3 of our 4 vendors tested were not reviewed to ensure they were not suspended or disbarred from federal funds. Cause Lack of oversight by management. Questioned Costs None Context Uniform Guidance states ?Review the non-federal entity?s procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.2096)?. During this review, we noted that during our testing of procurement, suspension, and debarment that the County doesn?t have a procurement policy that follows Uniform Guidance. We also noted during testing for suspension and debarment that 3 of our 4 vendors tested were not reviewed to ensure they were not suspended or disbarred from federal funds. Effect The County has an increased risk of not being compliance with federal procurement requirements and increased risk of entering into a covered transaction with a vendor who is suspended or disbarred from federal funds. Repeat Finding Yes ? see 2021-005 Recommendation The County should update their Procurement Policy to include suspension and debarment verbiage. Views of Responsible Officials See Corrective Action Plan.
DEPARTMENT OF HEALTH AND HUMAN SERVICES Program Information Assistance Listing # 93.137 Community Programs to Improve Minority Health Grant Program 2022-002 Policies and Procedures Material Weakness Criteria: The Code of Federal Regulations (CFR) Section 200.318 - 200.326 require written policies concerning methods of procurement for goods and services. Condition: The Organization did not have a written procurement policy that included all of the required elements during 2022. Cause: The Organization is smaller and while general procedures for the procurement of goods and services have been established, they were not written and did not meet all of the requirements of the CFR. Effect: The Organization is not in compliance with Section 200.318 - 200.326 of the Code of Federal Regulations. Auditor?s Recommendation: We recommend that the Organization adopt a formal written procurement policy in the format and with the elements required by 2 CFR Sections 200.318 to 200.326. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and adopted a ?Fiscal Policies and Procedures Manual? on October 1, 2022.
DEPARTMENT OF HEALTH AND HUMAN SERVICES Program Information Assistance Listing # 93.137 Community Programs to Improve Minority Health Grant Program 2022-002 Policies and Procedures Material Weakness Criteria: The Code of Federal Regulations (CFR) Section 200.318 - 200.326 require written policies concerning methods of procurement for goods and services. Condition: The Organization did not have a written procurement policy that included all of the required elements during 2022. Cause: The Organization is smaller and while general procedures for the procurement of goods and services have been established, they were not written and did not meet all of the requirements of the CFR. Effect: The Organization is not in compliance with Section 200.318 - 200.326 of the Code of Federal Regulations. Auditor?s Recommendation: We recommend that the Organization adopt a formal written procurement policy in the format and with the elements required by 2 CFR Sections 200.318 to 200.326. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and adopted a ?Fiscal Policies and Procedures Manual? on October 1, 2022.
2022-004 U.S. Department of Justice Federal Financial Assistance Listing #16.575 Victims of Crime Act (VOCA) Procurement, Suspension and Debarment Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria - Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required depending on the dollar amount of the transaction. Condition - During the course of our engagement, we identified that there was no observable documentation to indicate that the required procurement procedures were performed on vendors. Cause - Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and all applicable CFR sections and controls were not adequately designed to ensure compliance with all of these requirements. Effect - A lack of established controls increases the overall risk that the Organization is contracting and awarding contracts which may not be the most cost advantageous. Questioned Costs - None reported Context/Sampling - A sample of 9 expenditures out of a population of 12 expenditures were selected for testing. Four of these met the conditions of the procurement policy (i.e., non- payroll related expenditures) and did not have the supporting documentation retained due to having entered into the contract during 2020 or prior to the implementation of the procurement policy in 2020. Two of these met the conditions of the procurement policy (i.e., non-payroll related expenditures) and did not go through the Organization?s procurement policy. Repeat Finding from Prior Year ? Yes, Finding 2021-004 Recommendation - We recommend that the Organization maintain the appropriate documentation evidencing that procurement procedures have been completed. Views of Responsible Officials - Management agrees with the finding.
2022-004 U.S. Department of Justice Federal Financial Assistance Listing #16.575 Victims of Crime Act (VOCA) Procurement, Suspension and Debarment Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria - Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required depending on the dollar amount of the transaction. Condition - During the course of our engagement, we identified that there was no observable documentation to indicate that the required procurement procedures were performed on vendors. Cause - Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and all applicable CFR sections and controls were not adequately designed to ensure compliance with all of these requirements. Effect - A lack of established controls increases the overall risk that the Organization is contracting and awarding contracts which may not be the most cost advantageous. Questioned Costs - None reported Context/Sampling - A sample of 9 expenditures out of a population of 12 expenditures were selected for testing. Four of these met the conditions of the procurement policy (i.e., non- payroll related expenditures) and did not have the supporting documentation retained due to having entered into the contract during 2020 or prior to the implementation of the procurement policy in 2020. Two of these met the conditions of the procurement policy (i.e., non-payroll related expenditures) and did not go through the Organization?s procurement policy. Repeat Finding from Prior Year ? Yes, Finding 2021-004 Recommendation - We recommend that the Organization maintain the appropriate documentation evidencing that procurement procedures have been completed. Views of Responsible Officials - Management agrees with the finding.
2022-004 U.S. Department of Justice Federal Financial Assistance Listing #16.575 Victims of Crime Act (VOCA) Procurement, Suspension and Debarment Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria - Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required depending on the dollar amount of the transaction. Condition - During the course of our engagement, we identified that there was no observable documentation to indicate that the required procurement procedures were performed on vendors. Cause - Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and all applicable CFR sections and controls were not adequately designed to ensure compliance with all of these requirements. Effect - A lack of established controls increases the overall risk that the Organization is contracting and awarding contracts which may not be the most cost advantageous. Questioned Costs - None reported Context/Sampling - A sample of 9 expenditures out of a population of 12 expenditures were selected for testing. Four of these met the conditions of the procurement policy (i.e., non- payroll related expenditures) and did not have the supporting documentation retained due to having entered into the contract during 2020 or prior to the implementation of the procurement policy in 2020. Two of these met the conditions of the procurement policy (i.e., non-payroll related expenditures) and did not go through the Organization?s procurement policy. Repeat Finding from Prior Year ? Yes, Finding 2021-004 Recommendation - We recommend that the Organization maintain the appropriate documentation evidencing that procurement procedures have been completed. Views of Responsible Officials - Management agrees with the finding.
2022-004 U.S. Department of Justice Federal Financial Assistance Listing #16.575 Victims of Crime Act (VOCA) Procurement, Suspension and Debarment Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria - Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required depending on the dollar amount of the transaction. Condition - During the course of our engagement, we identified that there was no observable documentation to indicate that the required procurement procedures were performed on vendors. Cause - Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and all applicable CFR sections and controls were not adequately designed to ensure compliance with all of these requirements. Effect - A lack of established controls increases the overall risk that the Organization is contracting and awarding contracts which may not be the most cost advantageous. Questioned Costs - None reported Context/Sampling - A sample of 9 expenditures out of a population of 12 expenditures were selected for testing. Four of these met the conditions of the procurement policy (i.e., non- payroll related expenditures) and did not have the supporting documentation retained due to having entered into the contract during 2020 or prior to the implementation of the procurement policy in 2020. Two of these met the conditions of the procurement policy (i.e., non-payroll related expenditures) and did not go through the Organization?s procurement policy. Repeat Finding from Prior Year ? Yes, Finding 2021-004 Recommendation - We recommend that the Organization maintain the appropriate documentation evidencing that procurement procedures have been completed. Views of Responsible Officials - Management agrees with the finding.
Federal agency: U.S. Department of Treasury Federal program name: COVID-19 State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP3395, 2022 Award Period: 6/13/2021 ? 12/31/2026 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance (Modified Opinion) Criteria or specific requirement: Non-federal entities other than states must follow the procurement standards set out at CFR sections 200.318 through 200.326. This includes utilizing one of the five allowable procurement methods, including small purchase guidelines for items over the micro-purchase threshold and sealed bids, competitive proposals, or noncompetitive proposals when items exceed the simplified acquisition threshold. In addition, the Uniform Guidance requires that the entity maintain records sufficient to detail the history of the procurement. Condition: In our testing for the State and Local Fiscal Recovery Funds procurements, it was noted that not all procurements followed the appropriate method and history of the transaction was not sufficiently documented. Questioned Costs: ALN 21.027 - $222,175.04 Context: Out of five procurement which were tested, we noted one for which the City did not retain documentation detailing the history of the procurement, including the rationale for choosing the particular vendor. Effect: The City is not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Recommendation: We recommend the City reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. This procurement process must be documented with proper supporting documentation. Condition: The County did not have proper procurement documentation available for the contracts tested in the audit. Questioned costs: None Context: Five of the five contracts tested did not have the proper supporting documentation to demonstrate that procurement procedures were followed in accordance with the County?s procurement policy. Cause: The contracts were in process before the funding was assigned to the projects and there was turnover at the County. Effect: Failure to document the procurement process exposes the County to the risk that the County?s procurement policy was not followed before the contracts were awarded. Repeat Finding: No. Recommendation: CLA recommends the County follow their internal procurement policy procedures and keep documentation of such procedures to ensure compliance with the federal procurement requirements. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. This procurement process must be documented with proper supporting documentation. Condition: The County did not have proper procurement documentation available for the contracts tested in the audit. Questioned costs: None Context: Five of the five contracts tested did not have the proper supporting documentation to demonstrate that procurement procedures were followed in accordance with the County?s procurement policy. Cause: The contracts were in process before the funding was assigned to the projects and there was turnover at the County. Effect: Failure to document the procurement process exposes the County to the risk that the County?s procurement policy was not followed before the contracts were awarded. Repeat Finding: No. Recommendation: CLA recommends the County follow their internal procurement policy procedures and keep documentation of such procedures to ensure compliance with the federal procurement requirements. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. This procurement process must be documented with proper supporting documentation. Condition: The County did not have proper procurement documentation available for the contracts tested in the audit. Questioned costs: None Context: Five of the five contracts tested did not have the proper supporting documentation to demonstrate that procurement procedures were followed in accordance with the County?s procurement policy. Cause: The contracts were in process before the funding was assigned to the projects and there was turnover at the County. Effect: Failure to document the procurement process exposes the County to the risk that the County?s procurement policy was not followed before the contracts were awarded. Repeat Finding: No. Recommendation: CLA recommends the County follow their internal procurement policy procedures and keep documentation of such procedures to ensure compliance with the federal procurement requirements. Views of responsible officials: There is no disagreement with the audit finding.
2022-003 FINDING Federal Program Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) Procurement, Suspension, Debarment Criteria Organizations must follow federal procurement standards as set out in 2 CFR section 200.318 through 200.326. For purchases that exceed $10,000, small purchase procedures must be followed including obtaining multiple quotes. Condition For an equipment purchase contract that exceeded $10,000, the County failed to obtain multiple quotes. Questioned Costs None Context The County was not in compliance with federal procurement standards. Cause Oversight by County staff. Effect County failed to obtain multiple quotes and was not in compliance with federal procurement requirements. Repeat Finding No Recommendation The County should implement procedures to ensure that federal procurement standards are followed for federal grant purchases. Views of Responsible Officials and Planned Corrective Actions The County agrees with the recommendation and will review its procedures.
2022-004 - PROCUREMENT Criteria: In accordance with 2 CFR Section 200.319(d), non-federal entities must have their own documented procedures for procurement transactions. The policy should incorporate all requirements within 2 CFR section 200.318 through 200.326 of the Uniform Guidance. Condition: As of December 31, 2022, the Township did not have their own written procurement policy to properly implement all the requirements of 2 CFR section 200.318 through 200.326 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Cause: The Township was unaware of the requirement. Effect: The Charter Township of Portage is not in compliance with the procurement policy requirements identified in 2 CFR section 200.318 through 200.326 which could jeopardize federal funding. Questioned Costs: This finding does not result in questioned costs. Recommendation: The Charter Township of Portage should create a procurement policy that meets all the requirements of 2 CFR section 200.318 through 200.326. View of Responsible Officials: Management is in agreement and has drafted a procurement policy that meets all the requirements of 2 CFR section 200.318 through 200.326 that has been approved by the Township board on June 12, 2023. The policy has been submitted to the Township attorney for review, and will be finalized pending any modifications or recommendations by their attorney.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: Yes; 2021-001 Program Name/Assistance Listing Title: MBDA Business Center Assistance Listing Number: 11.805 Federal Agency: US Department of Commerce Federal Award Numbers: MB20OBD8050207, MB21OBD8050182 Pass-Through Agency: N/A Questioned Costs: $200,052 Type of Finding: Noncompliance, Significant Deficiency 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 Adequate internal controls over the organization?s procurement procedures to ensure compliance with federal regulations and guidelines were not in place. In addition, the organization did not verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. CAUSE Staff were not aware of the procurement requirements contained within 2 CFR part 200, and, therefore, no internal controls had been designed or implemented to avoid non-compliance until June 2022 when the organization underwent its first single audit. A procurement policy was created and implemented in October 2022, well after the contracts were in place for the purchases identified in the finding. EFFECT The organization was not in compliance with federal guidelines regarding procurement. CONTEXT During our review of purchases, we noted the following: ? The Organization did not establish written procurement standards until October 2022. The procurements standards did not establish suspension and debarment checks for vendors. ? Small purchase procedures were not followed for seven purchases that exceeded the micropurchase threshold ($10,000) but were less than the simplified acquisition threshold ($250,000). These purchases were contracted before the Organization was aware of the deficiency, which was first identified during the previous single audit in summer 2022. ? The Organization did not verify four vendors were not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION The Organization should establish written procurement standards address suspension and debarment requirements. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: Yes; 2021-001 Program Name/Assistance Listing Title: MBDA Business Center Assistance Listing Number: 11.805 Federal Agency: US Department of Commerce Federal Award Numbers: MB20OBD8050207, MB21OBD8050182 Pass-Through Agency: N/A Questioned Costs: $200,052 Type of Finding: Noncompliance, Significant Deficiency 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 Adequate internal controls over the organization?s procurement procedures to ensure compliance with federal regulations and guidelines were not in place. In addition, the organization did not verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. CAUSE Staff were not aware of the procurement requirements contained within 2 CFR part 200, and, therefore, no internal controls had been designed or implemented to avoid non-compliance until June 2022 when the organization underwent its first single audit. A procurement policy was created and implemented in October 2022, well after the contracts were in place for the purchases identified in the finding. EFFECT The organization was not in compliance with federal guidelines regarding procurement. CONTEXT During our review of purchases, we noted the following: ? The Organization did not establish written procurement standards until October 2022. The procurements standards did not establish suspension and debarment checks for vendors. ? Small purchase procedures were not followed for seven purchases that exceeded the micropurchase threshold ($10,000) but were less than the simplified acquisition threshold ($250,000). These purchases were contracted before the Organization was aware of the deficiency, which was first identified during the previous single audit in summer 2022. ? The Organization did not verify four vendors were not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION The Organization should establish written procurement standards address suspension and debarment requirements. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
2022-004 Department of Environmental Protection Agency, Passed through North Dakota Department of Environmental Quality Federal Financial Assistance Listing/CFDA Number 66.458 Clean Water State Revolving Fund Cluster Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance Criteria ? Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition ? During the course of our engagement, it was identified that the District did not have a written policy on procurement that satisfied the requirements of 2 CFR sections 200.318 through 200.326. Cause ? Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections and controls were not adequately designed to ensure compliance with all of these requirements. Effect ? A lack of documented policies increase the overall risk that employees are not aware of the specific requirements with of procurement, suspension, and debarment. Questioned Costs ? None reported Context/Sampling ? Overall Procurement Policy Repeat Finding from Prior Year(s) ? No Recommendation ? We recommend that management establish a written policy that addresses all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.326 and maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. Views of Responsible Officials ? There is no disagreement with the finding.
Finding # 2022-002 Type: Immaterial Noncompliance over Procurement Assistance Listing Number: U.S. Department of Agriculture - Rural Development 10.755 Rural Innovation Stronger Economy U.S. Department of the Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria/Requirement: The Organization should follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 including documentation to justify when a competitive process was not used. The Organization?s procurement policies also should be expanded to incorporate the provisions of the standards referenced. Condition: The procurement process was not properly documented and executed. For two out of two samples selected for testing, there was no documentation of the procurement process performed or reviewed. Cause: The Organization?s procurement policy does not meet the required federal standards, and application of the policy was not consistently applied. Effect: The Organization?s contracts could be from disbarred or disallowed vendors. Questioned Costs: None. Recommendation: The Organization's procurement policy must have documented procurement procedures, consistent with state, local, and tribal laws and regulations for the acquisition of property or services required under a federal award or subaward. The Organization should maintain records sufficient to detail the history of procurement. Management Response: Management will review the federal procurement guidelines and update its policies and procedures to be consistent with federal requirements.
Finding # 2022-002 Type: Immaterial Noncompliance over Procurement Assistance Listing Number: U.S. Department of Agriculture - Rural Development 10.755 Rural Innovation Stronger Economy U.S. Department of the Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria/Requirement: The Organization should follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 including documentation to justify when a competitive process was not used. The Organization?s procurement policies also should be expanded to incorporate the provisions of the standards referenced. Condition: The procurement process was not properly documented and executed. For two out of two samples selected for testing, there was no documentation of the procurement process performed or reviewed. Cause: The Organization?s procurement policy does not meet the required federal standards, and application of the policy was not consistently applied. Effect: The Organization?s contracts could be from disbarred or disallowed vendors. Questioned Costs: None. Recommendation: The Organization's procurement policy must have documented procurement procedures, consistent with state, local, and tribal laws and regulations for the acquisition of property or services required under a federal award or subaward. The Organization should maintain records sufficient to detail the history of procurement. Management Response: Management will review the federal procurement guidelines and update its policies and procedures to be consistent with federal requirements.
Finding # 2022-002 Type: Immaterial Noncompliance over Procurement Assistance Listing Number: U.S. Department of Agriculture - Rural Development 10.755 Rural Innovation Stronger Economy U.S. Department of the Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria/Requirement: The Organization should follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 including documentation to justify when a competitive process was not used. The Organization?s procurement policies also should be expanded to incorporate the provisions of the standards referenced. Condition: The procurement process was not properly documented and executed. For two out of two samples selected for testing, there was no documentation of the procurement process performed or reviewed. Cause: The Organization?s procurement policy does not meet the required federal standards, and application of the policy was not consistently applied. Effect: The Organization?s contracts could be from disbarred or disallowed vendors. Questioned Costs: None. Recommendation: The Organization's procurement policy must have documented procurement procedures, consistent with state, local, and tribal laws and regulations for the acquisition of property or services required under a federal award or subaward. The Organization should maintain records sufficient to detail the history of procurement. Management Response: Management will review the federal procurement guidelines and update its policies and procedures to be consistent with federal requirements.
2022-001 ? Procurement Suspension & Debarment Program: AL# 97.024 ? Emergency Food and Shelter National Board Program Sponsor Award Number: Phase 39; ARPAR Sponsor Agency: U.S. Department of Homeland Security Criteria: Non-federal entities that are operating federal programs must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. This includes utilizing appropriate procurement methods and following requirements for each method selected. 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)). Citation: 2 CFR section 200.320(b) Condition: The Organization did not obtain price or rate quotes from an adequate number of qualified sources. Cause: Although the Organization?s procurement policies and procedures are updated to comply with the Uniform Guidance, they were not consistently followed. Effect: Failure to obtain price or quotes from an adequate number of qualified sources may result in ineffective use of government funds. Questioned Costs: None. Context: During our testing of the Organization?s procurement requirements, we noted a lack of documentation supporting the Organization?s review of an adequate number of qualified sources before the procurement decision was made. Repeat Finding: No Recommendation: We recommend that the Organization implement monitoring procedures to ensure internally established procurement policies are followed. Documentation should include the rationale for the method of procurement used, the basis for contractor selection, and the basis for the contract price. Views of Responsible Officials: See Corrective Action Plan.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Moving to Work Demonstration Program Assistance Listing Number: 14.881 Federal Award Identification Number and Year: OR02VO - 2022 Award Period: January 1, 2022 ? December 31, 2022 Compliance Requirement: Special Tests and Provisions ? Wage Rate Requirements Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Home Forward must do the following: ? As a condition to executing payment for a contract subject to wage rate requirements, require the contractor to submit to them weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (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: Home Forward provided payment for a contractor agreement that included wage rate requirements. Questioned costs: Unable to determine. Context: Exceptions noted in 1 out of 5 contracts tested for wage rate requirements: ? Payment was made on a contract for which certified payrolls were required but not submitted. The sample was statistically valid. Cause: Home Forward did not follow the established procedures for payment of construction contracts subject to wage rate requirements. Effect: Home Forward is not in compliance with wage rate requirements. Repeat Finding: No. Recommendation: We recommend Home Forward review their process and internal controls over contracts subject to wage rate requirements to ensure compliance with HUD requirements. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2022-001: Reportable Finding Considered a Significant Deficiency ? Procurement Assistance Listing Number: 10.181 Agency: U.S. Department of Agriculture Program: Agricultural Worker Pandemic Relief and Protection Program Award Number: AM22FFWDC0002-00 Grant Years: 2022 Criteria: Nonfederal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Section 200.318 General procurement standards, states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 200.320 Methods of procurement to be followed, states that for acquisitions exceeding the simplified acquisition threshold, the nonfederal entity must use one of the following procurement methods: (a) the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); (b) the competitive proposals method under the conditions specified in 2 CFR section 200.320(b)(2); or (c) the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c). Condition: During our 2022 audit, we noted three consultant contractors which were charged to the Federal program under the competitive proposals method but did not comply with the criteria in 2 CFR section 200.320(b) and one noncompetitive proposals method but did not comply with the criteria in 2 CFR section 200.320(c). We noted that the Foundation did not have records sufficient to detail the history and the rationale of the method of procurement at the time the contracts were executed. Cause: The Foundation did not document the history or the justification for the method of procurement selected for various consultants charged to the Federal program at the time the contracts were executed. Effect: The Foundation may have inadvertently selected noncompetitive proposals by not following the requirements noted in section 200.320 Methods of procurement to be followed, and thereby failing to full and open competition as required by the regulations. Context: There were four consultants during the audit period for which 2 CFR section 200.320 applied. Questioned Costs: There are no questioned costs associated with this finding. Repeat Finding: This is not a repeat finding. Recommendation: The Foundation should adopt and enforce a procurement policy that follows the procurement standards set out at 2 CFR sections 200.318 through 200.326. We also recommend that documentation is maintained to substantiate adherence to this policy and ensure that all instances are adequately documented according to the regulations, including for contacts already in place.
2022-003 Procurement Federal Agency: U.S. Department of Agriculture Federal Program Name: State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Assistance Listing Number: 10.561 Federal Award Identification Number and Year: 22MN101S2514 - 202 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 22MN101S2514, 22MN127Q7503, 22MN101S2520 Award Period: January 1, 2022 through December 31, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition/Context: For 1 of 2 vendors tested, no documentation was maintained to support the method of procurement, selection of contract type, contractor selection or rejection, or the basis for the contract price. The sample was a statistically valid sample. Questioned costs: $111,837 was paid to the vendor during 2022. Cause: County federal procurement policies were not followed. Effect: The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement or the compliance requirement could result in the loss of federal funds to the County. Repeat Finding: No Recommendation: We recommend County management establish a system of internal controls to ensure compliance with federal procurement requirements. Views of responsible officials: There is no disagreement with the audit finding.
2022-003 Procurement Federal Agency: U.S. Department of Agriculture Federal Program Name: State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Assistance Listing Number: 10.561 Federal Award Identification Number and Year: 22MN101S2514 - 202 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 22MN101S2514, 22MN127Q7503, 22MN101S2520 Award Period: January 1, 2022 through December 31, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition/Context: For 1 of 2 vendors tested, no documentation was maintained to support the method of procurement, selection of contract type, contractor selection or rejection, or the basis for the contract price. The sample was a statistically valid sample. Questioned costs: $111,837 was paid to the vendor during 2022. Cause: County federal procurement policies were not followed. Effect: The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement or the compliance requirement could result in the loss of federal funds to the County. Repeat Finding: No Recommendation: We recommend County management establish a system of internal controls to ensure compliance with federal procurement requirements. Views of responsible officials: There is no disagreement with the audit finding.
2022-003 Procurement Federal Agency: U.S. Department of Agriculture Federal Program Name: State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Assistance Listing Number: 10.561 Federal Award Identification Number and Year: 22MN101S2514 - 202 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 22MN101S2514, 22MN127Q7503, 22MN101S2520 Award Period: January 1, 2022 through December 31, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition/Context: For 1 of 2 vendors tested, no documentation was maintained to support the method of procurement, selection of contract type, contractor selection or rejection, or the basis for the contract price. The sample was a statistically valid sample. Questioned costs: $111,837 was paid to the vendor during 2022. Cause: County federal procurement policies were not followed. Effect: The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement or the compliance requirement could result in the loss of federal funds to the County. Repeat Finding: No Recommendation: We recommend County management establish a system of internal controls to ensure compliance with federal procurement requirements. Views of responsible officials: There is no disagreement with the audit finding.
Finding number: 2022-001 Repeat finding: No Assistance Listing Number: 93.224 / 93.527 Assistance Listing Title: Health Center Program Cluster Federal Agency: U.S. Department of Health and Human Services Type of Finding: Noncompliance, Significant Deficiency Description: Procurement and Suspension and Debarment Criteria: Under 2 CFR ?215.43 the Organization is required to implement certain procurement policies that adhere to the minimum Federal requirements as outlined in 2 CFR ?215.44. Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR Sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: The procurement method the Organization used did not meet procurement standards as set forth in 2 CFR sections 200.320. A sole source procurement method was used when the vendor did not meet the sole source definition. Cause: The Organization was not fully aware of the federal procurement compliance requirements. Effect: The Organization was not in compliance with their own policies or with federal regulations. Recommendation: The Organization should ensure procurement policies are being followed for all procurement levels. The Organozation should also seek out additonal training for procurment to ensure federal rules and requirements are being met. View of responsible officials: Management acknowledges this condition related to lack of adequate controls over procurement and is creating controls that will assure compliance with requirements.
Finding number: 2022-001 Repeat finding: No Assistance Listing Number: 93.224 / 93.527 Assistance Listing Title: Health Center Program Cluster Federal Agency: U.S. Department of Health and Human Services Type of Finding: Noncompliance, Significant Deficiency Description: Procurement and Suspension and Debarment Criteria: Under 2 CFR ?215.43 the Organization is required to implement certain procurement policies that adhere to the minimum Federal requirements as outlined in 2 CFR ?215.44. Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR Sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: The procurement method the Organization used did not meet procurement standards as set forth in 2 CFR sections 200.320. A sole source procurement method was used when the vendor did not meet the sole source definition. Cause: The Organization was not fully aware of the federal procurement compliance requirements. Effect: The Organization was not in compliance with their own policies or with federal regulations. Recommendation: The Organization should ensure procurement policies are being followed for all procurement levels. The Organozation should also seek out additonal training for procurment to ensure federal rules and requirements are being met. View of responsible officials: Management acknowledges this condition related to lack of adequate controls over procurement and is creating controls that will assure compliance with requirements.