Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Procurement. Type of Finding: Material Weakness in Internal Control Over Compliance. Criteria: Internal controls should be in place to provide reasonable assurance that procurement of goods and services are made in compliance with federal regulations and other procurement requirements, as applicable. Condition: The City lacks sufficient controls over procurement to ensure compliance with federal regulations and other procurement requirements, as applicable. Cause: The City did not design and implement controls over compliance with procurement. Effect or Potential Effect: Failure to have adequate internal controls over compliance with procurement could result in the acquisition of goods or services in violation with administrative requirements, federal regulations, and other procurement requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City create and adopt an official written policy for procurement and contracts establishing contract files that document significant procurement history; methods of procurement authorized including selection of contract type, contractor selection or rejection, and the basis of contract price; verification that procurements provide full and open competition; requirements for cost or price analysis, including for contract modifications; obtaining and reacting to suspension and debarment certifications; and other applicable requirements for procurements under federal awards are followed. We also recommend that personnel with adequate knowledge and experience of responsibilities for procurements for federal awards review procurement and contracting decisions for compliance with federal procurement policies. Views of Responsible Officials and Planned Corrective Action: Management concurs with the audit finding. The City will develop written policies and procedures for procurement, including the relevant provisions required by 2 CFR § 200.318 through 2 CFR § 200.326 Contract provisions. Management will evaluate the need to contract with local government consultants to perform control procedures where City personnel are not available or qualified to perform.
Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Procurement. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.319(d) requires that the non-Federal entity must maintain written procedures for procurement transactions. Condition: We noted that the City did not have written procedures for procurement transactions that include the provisions required by the Procurement Standards 2 CFR § 200.318 through 2 CFR § 200.327 in fiscal year 2022. Cause: The City was not aware of the requirement to have written procedures for procurement transactions. Effect: Failure to have adequate written procedures for procurement transactions could result in the acquisition of goods or services in violation with administrative requirements, federal regulations, other procurement requirements, and Uniform Guidance requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop adequate written policies and procedures for procurement transactions. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written policies and procedures which include the relevant provisions required by 2 CFR § 200.318 through 2 CFR § 200.326 Contract provisions.
Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Procurement. Type of Finding: Material Weakness in Internal Control Over Compliance. Criteria: Internal controls should be in place to provide reasonable assurance that procurement of goods and services are made in compliance with federal regulations and other procurement requirements, as applicable. Condition: The City lacks sufficient controls over procurement to ensure compliance with federal regulations and other procurement requirements, as applicable. Cause: The City did not design and implement controls over compliance with procurement. Effect or Potential Effect: Failure to have adequate internal controls over compliance with procurement could result in the acquisition of goods or services in violation with administrative requirements, federal regulations, and other procurement requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City create and adopt an official written policy for procurement and contracts establishing contract files that document significant procurement history; methods of procurement authorized including selection of contract type, contractor selection or rejection, and the basis of contract price; verification that procurements provide full and open competition; requirements for cost or price analysis, including for contract modifications; obtaining and reacting to suspension and debarment certifications; and other applicable requirements for procurements under federal awards are followed. We also recommend that personnel with adequate knowledge and experience of responsibilities for procurements for federal awards review procurement and contracting decisions for compliance with federal procurement policies. Views of Responsible Officials and Planned Corrective Action: Management concurs with the audit finding. The City will develop written policies and procedures for procurement, including the relevant provisions required by 2 CFR § 200.318 through 2 CFR § 200.326 Contract provisions. Management will evaluate the need to contract with local government consultants to perform control procedures where City personnel are not available or qualified to perform.
Assistance Listing, Federal Agency, and Program Name 93.224, 93.527; COVID 19: Health Center Program Cluster Federal Award Identification Number and Year H80CS24134, H8ECS37956, H8FCS40356, and H8GCS48255 2022 Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria In accordance with 2 CFR sections 200.318 200.326, the Organization must maintain and use documented procedures for procurement transactions that are consistent with State, local, and tribal laws and regulations and the standards identified in CFR sections 200.317 through 200.327. The Organization must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Additionally, in accorance with 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209 6, the Organization must verify that the person with whom you intend to do business is not excluded or disqualified. Condition Policies and procedures in place over procurement, suspension, and debarment are not in conformance with Uniform Guidance. Additionally, the Organization did not procure in accordance with the regulations, including maintaining records sufficient to detail the history of each procurement transaction nor did they comply with suspension and debarement rules. Questioned Costs $1,121,985 Identification of How Questioned Costs Were Computed Questioned costs resulted from the Organization not maintaining or using the required procurement procedures over non payroll expenditures. Total non payroll expenditures included on the SEFA total $1,121,985. Context For all four contracts selected for testing, there were no records manintained to support procurement method, contract selection, or verification the entity was not suspended or disbared. Upon further procedures, we identified that the Organization did not follow any procurement guidelines in procuring all non payroll transactions. Cause and Effect There are no procurement, suspension, and debarement policies in place. As a result, no procedures are being completed over these compliance categories and thus the Organization did not comply with the related compliance requirements. Recommendation We recommend the Organization implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance and follow those policies. Views of Responsible Officials and Planned Corrective Actions The Organization will implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance.
Assistance Listing, Federal Agency, and Program Name 93.224, 93.527; COVID 19: Health Center Program Cluster Federal Award Identification Number and Year H80CS24134, H8ECS37956, H8FCS40356, and H8GCS48255 2022 Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria In accordance with 2 CFR sections 200.318 200.326, the Organization must maintain and use documented procedures for procurement transactions that are consistent with State, local, and tribal laws and regulations and the standards identified in CFR sections 200.317 through 200.327. The Organization must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Additionally, in accorance with 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209 6, the Organization must verify that the person with whom you intend to do business is not excluded or disqualified. Condition Policies and procedures in place over procurement, suspension, and debarment are not in conformance with Uniform Guidance. Additionally, the Organization did not procure in accordance with the regulations, including maintaining records sufficient to detail the history of each procurement transaction nor did they comply with suspension and debarement rules. Questioned Costs $1,121,985 Identification of How Questioned Costs Were Computed Questioned costs resulted from the Organization not maintaining or using the required procurement procedures over non payroll expenditures. Total non payroll expenditures included on the SEFA total $1,121,985. Context For all four contracts selected for testing, there were no records manintained to support procurement method, contract selection, or verification the entity was not suspended or disbared. Upon further procedures, we identified that the Organization did not follow any procurement guidelines in procuring all non payroll transactions. Cause and Effect There are no procurement, suspension, and debarement policies in place. As a result, no procedures are being completed over these compliance categories and thus the Organization did not comply with the related compliance requirements. Recommendation We recommend the Organization implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance and follow those policies. Views of Responsible Officials and Planned Corrective Actions The Organization will implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance.
Assistance Listing, Federal Agency, and Program Name 93.224, 93.527; COVID 19: Health Center Program Cluster Federal Award Identification Number and Year H80CS24134, H8ECS37956, H8FCS40356, and H8GCS48255 2022 Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria In accordance with 2 CFR sections 200.318 200.326, the Organization must maintain and use documented procedures for procurement transactions that are consistent with State, local, and tribal laws and regulations and the standards identified in CFR sections 200.317 through 200.327. The Organization must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Additionally, in accorance with 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209 6, the Organization must verify that the person with whom you intend to do business is not excluded or disqualified. Condition Policies and procedures in place over procurement, suspension, and debarment are not in conformance with Uniform Guidance. Additionally, the Organization did not procure in accordance with the regulations, including maintaining records sufficient to detail the history of each procurement transaction nor did they comply with suspension and debarement rules. Questioned Costs $1,121,985 Identification of How Questioned Costs Were Computed Questioned costs resulted from the Organization not maintaining or using the required procurement procedures over non payroll expenditures. Total non payroll expenditures included on the SEFA total $1,121,985. Context For all four contracts selected for testing, there were no records manintained to support procurement method, contract selection, or verification the entity was not suspended or disbared. Upon further procedures, we identified that the Organization did not follow any procurement guidelines in procuring all non payroll transactions. Cause and Effect There are no procurement, suspension, and debarement policies in place. As a result, no procedures are being completed over these compliance categories and thus the Organization did not comply with the related compliance requirements. Recommendation We recommend the Organization implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance and follow those policies. Views of Responsible Officials and Planned Corrective Actions The Organization will implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance.
Assistance Listing, Federal Agency, and Program Name 93.224, 93.527; COVID 19: Health Center Program Cluster Federal Award Identification Number and Year H80CS24134, H8ECS37956, H8FCS40356, and H8GCS48255 2022 Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria In accordance with 2 CFR sections 200.318 200.326, the Organization must maintain and use documented procedures for procurement transactions that are consistent with State, local, and tribal laws and regulations and the standards identified in CFR sections 200.317 through 200.327. The Organization must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Additionally, in accorance with 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209 6, the Organization must verify that the person with whom you intend to do business is not excluded or disqualified. Condition Policies and procedures in place over procurement, suspension, and debarment are not in conformance with Uniform Guidance. Additionally, the Organization did not procure in accordance with the regulations, including maintaining records sufficient to detail the history of each procurement transaction nor did they comply with suspension and debarement rules. Questioned Costs $1,121,985 Identification of How Questioned Costs Were Computed Questioned costs resulted from the Organization not maintaining or using the required procurement procedures over non payroll expenditures. Total non payroll expenditures included on the SEFA total $1,121,985. Context For all four contracts selected for testing, there were no records manintained to support procurement method, contract selection, or verification the entity was not suspended or disbared. Upon further procedures, we identified that the Organization did not follow any procurement guidelines in procuring all non payroll transactions. Cause and Effect There are no procurement, suspension, and debarement policies in place. As a result, no procedures are being completed over these compliance categories and thus the Organization did not comply with the related compliance requirements. Recommendation We recommend the Organization implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance and follow those policies. Views of Responsible Officials and Planned Corrective Actions The Organization will implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering & Office of Cyber Infrastructure AL No.: 47.050, 47.070, 47.079 & 47.080 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019 -05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), OAC-1931278 (10/1/2019 – 09/30/2022), OAC- 1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OAC-2103780 (10/01/2021 – 09/30/2026), OAC-2118329 (10/01/2021 – 09/30/2026),OISE-1855654 (05/15/2019 – 12/31/2023) & OAC-1664061 (10/01/17 – 09/30/2022) Pass Through Entity: Utah State University MW2022-006 PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition The auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to noncompliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2022. CUAHSI did not complete the verification of its 2022 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded.Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds and / or possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2021-007. Recommendation CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering & Office of Cyber Infrastructure AL No.: 47.050, 47.070, 47.079 & 47.080 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019 -05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), OAC-1931278 (10/1/2019 – 09/30/2022), OAC- 1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OAC-2103780 (10/01/2021 – 09/30/2026), OAC-2118329 (10/01/2021 – 09/30/2026),OISE-1855654 (05/15/2019 – 12/31/2023) & OAC-1664061 (10/01/17 – 09/30/2022) Pass Through Entity: Utah State University MW2022-006 PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition The auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to noncompliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2022. CUAHSI did not complete the verification of its 2022 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded.Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds and / or possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2021-007. Recommendation CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering & Office of Cyber Infrastructure AL No.: 47.050, 47.070, 47.079 & 47.080 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019 -05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), OAC-1931278 (10/1/2019 – 09/30/2022), OAC- 1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OAC-2103780 (10/01/2021 – 09/30/2026), OAC-2118329 (10/01/2021 – 09/30/2026),OISE-1855654 (05/15/2019 – 12/31/2023) & OAC-1664061 (10/01/17 – 09/30/2022) Pass Through Entity: Utah State University MW2022-006 PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition The auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to noncompliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2022. CUAHSI did not complete the verification of its 2022 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded.Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds and / or possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2021-007. Recommendation CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering & Office of Cyber Infrastructure AL No.: 47.050, 47.070, 47.079 & 47.080 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019 -05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), OAC-1931278 (10/1/2019 – 09/30/2022), OAC- 1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OAC-2103780 (10/01/2021 – 09/30/2026), OAC-2118329 (10/01/2021 – 09/30/2026),OISE-1855654 (05/15/2019 – 12/31/2023) & OAC-1664061 (10/01/17 – 09/30/2022) Pass Through Entity: Utah State University MW2022-006 PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition The auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to noncompliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2022. CUAHSI did not complete the verification of its 2022 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded.Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds and / or possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2021-007. Recommendation CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Program Information: U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $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. 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)). Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. All non-procurement transactions entered into by a passthrough entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. 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 Section 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 Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR Section 180.300). Condition/Context: 20.205 – Highway Planning and Construction Cluster • 1 of 8 Individually Important Items (IIIs) had bidding/solicitation documentation but did not have proper approval. • 2 of 8 IIIs had documentation of one quote obtained but no further documentation. • 5 of 8 IIIs and 2 of 2 procurement samples had no bidding/solicitation support provided. • 8 of 8 IIIs and 2 of 2 suspension and debarment samples did not have documentation of a suspension and debarment search prior to payment. 20.509 – Road Maintenance Programs • 3 of 3 IIIs and 7 of 7 procurement samples had no bidding/solicitation support provided. • 3 of 3 IIIs and 2 of 2 suspension and debarment samples did not have proper documentation provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, Joint Programs could be subject to questioned costs or other sanctions from funding agencies if they determine that Joint Programs did not assure full and open competition for the procurements and/or if vendors retained and paid from federal funds and are later found to be suspended or debarred. Questioned Costs: Known – $971,925 AL# 20.205 Known – $563,676 AL# 20.509 Repeat Finding: Yes – 2021-005. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. We also recommend that Joint Programs conduct training for staff to review procurement and suspension and debarment policies and procedures and maintain all records in a way that allows them to be located and reviewed at any point in time. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $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. 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)). Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. All non-procurement transactions entered into by a passthrough entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. 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 Section 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 Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR Section 180.300). Condition/Context: 20.205 – Highway Planning and Construction Cluster • 1 of 8 Individually Important Items (IIIs) had bidding/solicitation documentation but did not have proper approval. • 2 of 8 IIIs had documentation of one quote obtained but no further documentation. • 5 of 8 IIIs and 2 of 2 procurement samples had no bidding/solicitation support provided. • 8 of 8 IIIs and 2 of 2 suspension and debarment samples did not have documentation of a suspension and debarment search prior to payment. 20.509 – Road Maintenance Programs • 3 of 3 IIIs and 7 of 7 procurement samples had no bidding/solicitation support provided. • 3 of 3 IIIs and 2 of 2 suspension and debarment samples did not have proper documentation provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, Joint Programs could be subject to questioned costs or other sanctions from funding agencies if they determine that Joint Programs did not assure full and open competition for the procurements and/or if vendors retained and paid from federal funds and are later found to be suspended or debarred. Questioned Costs: Known – $971,925 AL# 20.205 Known – $563,676 AL# 20.509 Repeat Finding: Yes – 2021-005. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. We also recommend that Joint Programs conduct training for staff to review procurement and suspension and debarment policies and procedures and maintain all records in a way that allows them to be located and reviewed at any point in time. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $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. 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)). Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. All non-procurement transactions entered into by a passthrough entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. 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 Section 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 Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR Section 180.300). Condition/Context: 20.205 – Highway Planning and Construction Cluster • 1 of 8 Individually Important Items (IIIs) had bidding/solicitation documentation but did not have proper approval. • 2 of 8 IIIs had documentation of one quote obtained but no further documentation. • 5 of 8 IIIs and 2 of 2 procurement samples had no bidding/solicitation support provided. • 8 of 8 IIIs and 2 of 2 suspension and debarment samples did not have documentation of a suspension and debarment search prior to payment. 20.509 – Road Maintenance Programs • 3 of 3 IIIs and 7 of 7 procurement samples had no bidding/solicitation support provided. • 3 of 3 IIIs and 2 of 2 suspension and debarment samples did not have proper documentation provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, Joint Programs could be subject to questioned costs or other sanctions from funding agencies if they determine that Joint Programs did not assure full and open competition for the procurements and/or if vendors retained and paid from federal funds and are later found to be suspended or debarred. Questioned Costs: Known – $971,925 AL# 20.205 Known – $563,676 AL# 20.509 Repeat Finding: Yes – 2021-005. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. We also recommend that Joint Programs conduct training for staff to review procurement and suspension and debarment policies and procedures and maintain all records in a way that allows them to be located and reviewed at any point in time. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $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. 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)). Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. All non-procurement transactions entered into by a passthrough entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. 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 Section 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 Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR Section 180.300). Condition/Context: 20.205 – Highway Planning and Construction Cluster • 1 of 8 Individually Important Items (IIIs) had bidding/solicitation documentation but did not have proper approval. • 2 of 8 IIIs had documentation of one quote obtained but no further documentation. • 5 of 8 IIIs and 2 of 2 procurement samples had no bidding/solicitation support provided. • 8 of 8 IIIs and 2 of 2 suspension and debarment samples did not have documentation of a suspension and debarment search prior to payment. 20.509 – Road Maintenance Programs • 3 of 3 IIIs and 7 of 7 procurement samples had no bidding/solicitation support provided. • 3 of 3 IIIs and 2 of 2 suspension and debarment samples did not have proper documentation provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, Joint Programs could be subject to questioned costs or other sanctions from funding agencies if they determine that Joint Programs did not assure full and open competition for the procurements and/or if vendors retained and paid from federal funds and are later found to be suspended or debarred. Questioned Costs: Known – $971,925 AL# 20.205 Known – $563,676 AL# 20.509 Repeat Finding: Yes – 2021-005. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. We also recommend that Joint Programs conduct training for staff to review procurement and suspension and debarment policies and procedures and maintain all records in a way that allows them to be located and reviewed at any point in time. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $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. 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)). Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. All non-procurement transactions entered into by a passthrough entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. 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 Section 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 Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR Section 180.300). Condition/Context: 20.205 – Highway Planning and Construction Cluster • 1 of 8 Individually Important Items (IIIs) had bidding/solicitation documentation but did not have proper approval. • 2 of 8 IIIs had documentation of one quote obtained but no further documentation. • 5 of 8 IIIs and 2 of 2 procurement samples had no bidding/solicitation support provided. • 8 of 8 IIIs and 2 of 2 suspension and debarment samples did not have documentation of a suspension and debarment search prior to payment. 20.509 – Road Maintenance Programs • 3 of 3 IIIs and 7 of 7 procurement samples had no bidding/solicitation support provided. • 3 of 3 IIIs and 2 of 2 suspension and debarment samples did not have proper documentation provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, Joint Programs could be subject to questioned costs or other sanctions from funding agencies if they determine that Joint Programs did not assure full and open competition for the procurements and/or if vendors retained and paid from federal funds and are later found to be suspended or debarred. Questioned Costs: Known – $971,925 AL# 20.205 Known – $563,676 AL# 20.509 Repeat Finding: Yes – 2021-005. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. We also recommend that Joint Programs conduct training for staff to review procurement and suspension and debarment policies and procedures and maintain all records in a way that allows them to be located and reviewed at any point in time. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $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. 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)). Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. All non-procurement transactions entered into by a passthrough entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. 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 Section 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 Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR Section 180.300). Condition/Context: 20.205 – Highway Planning and Construction Cluster • 1 of 8 Individually Important Items (IIIs) had bidding/solicitation documentation but did not have proper approval. • 2 of 8 IIIs had documentation of one quote obtained but no further documentation. • 5 of 8 IIIs and 2 of 2 procurement samples had no bidding/solicitation support provided. • 8 of 8 IIIs and 2 of 2 suspension and debarment samples did not have documentation of a suspension and debarment search prior to payment. 20.509 – Road Maintenance Programs • 3 of 3 IIIs and 7 of 7 procurement samples had no bidding/solicitation support provided. • 3 of 3 IIIs and 2 of 2 suspension and debarment samples did not have proper documentation provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, Joint Programs could be subject to questioned costs or other sanctions from funding agencies if they determine that Joint Programs did not assure full and open competition for the procurements and/or if vendors retained and paid from federal funds and are later found to be suspended or debarred. Questioned Costs: Known – $971,925 AL# 20.205 Known – $563,676 AL# 20.509 Repeat Finding: Yes – 2021-005. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. We also recommend that Joint Programs conduct training for staff to review procurement and suspension and debarment policies and procedures and maintain all records in a way that allows them to be located and reviewed at any point in time. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $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. 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)). Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. All non-procurement transactions entered into by a passthrough entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. 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 Section 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 Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR Section 180.300). Condition/Context: 20.205 – Highway Planning and Construction Cluster • 1 of 8 Individually Important Items (IIIs) had bidding/solicitation documentation but did not have proper approval. • 2 of 8 IIIs had documentation of one quote obtained but no further documentation. • 5 of 8 IIIs and 2 of 2 procurement samples had no bidding/solicitation support provided. • 8 of 8 IIIs and 2 of 2 suspension and debarment samples did not have documentation of a suspension and debarment search prior to payment. 20.509 – Road Maintenance Programs • 3 of 3 IIIs and 7 of 7 procurement samples had no bidding/solicitation support provided. • 3 of 3 IIIs and 2 of 2 suspension and debarment samples did not have proper documentation provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, Joint Programs could be subject to questioned costs or other sanctions from funding agencies if they determine that Joint Programs did not assure full and open competition for the procurements and/or if vendors retained and paid from federal funds and are later found to be suspended or debarred. Questioned Costs: Known – $971,925 AL# 20.205 Known – $563,676 AL# 20.509 Repeat Finding: Yes – 2021-005. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. We also recommend that Joint Programs conduct training for staff to review procurement and suspension and debarment policies and procedures and maintain all records in a way that allows them to be located and reviewed at any point in time. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $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. 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)). Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. All non-procurement transactions entered into by a passthrough entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. 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 Section 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 Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR Section 180.300). Condition/Context: 20.205 – Highway Planning and Construction Cluster • 1 of 8 Individually Important Items (IIIs) had bidding/solicitation documentation but did not have proper approval. • 2 of 8 IIIs had documentation of one quote obtained but no further documentation. • 5 of 8 IIIs and 2 of 2 procurement samples had no bidding/solicitation support provided. • 8 of 8 IIIs and 2 of 2 suspension and debarment samples did not have documentation of a suspension and debarment search prior to payment. 20.509 – Road Maintenance Programs • 3 of 3 IIIs and 7 of 7 procurement samples had no bidding/solicitation support provided. • 3 of 3 IIIs and 2 of 2 suspension and debarment samples did not have proper documentation provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, Joint Programs could be subject to questioned costs or other sanctions from funding agencies if they determine that Joint Programs did not assure full and open competition for the procurements and/or if vendors retained and paid from federal funds and are later found to be suspended or debarred. Questioned Costs: Known – $971,925 AL# 20.205 Known – $563,676 AL# 20.509 Repeat Finding: Yes – 2021-005. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. We also recommend that Joint Programs conduct training for staff to review procurement and suspension and debarment policies and procedures and maintain all records in a way that allows them to be located and reviewed at any point in time. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
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 200.317 - 200.327. 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 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 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR 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 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 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-Federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR 200.320(b); the competitive proposals method under the conditions specified in 2 CFR 200.320(b)(2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” Although the Village contracted with a consultant to assist the Village with compliance with various procurement compliance requirements, the Village does not have any formal policies in place regarding procurement requirements. We recommend that the Village adopt formal policies and procedures that address procurement requirements.
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.