Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A220087, 2022 Pass-Through Agency: Minnesota Department of Education Pass-Through Numbers: H027A210087, H027X210087, H173A210086, H173X210086 Award Period: July 1, 2021 ? September 30, 2022 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 c CFR sections 200.318 through 200.326. This includes utilizing one of the five allowable procurement methods, including small purchase guidelines for items over the micro-purchase threshold and sealed bids, competitive proposals, or noncompetitive proposals when items exceed the simplified acquisition threshold. In addition, the Uniform Guidance requires that the entity maintain records sufficient to detail the history of the procurement. Condition: During our testing of the District?s procurements within the Special Education program, it was noted that not all procurements followed the appropriate method and history of the transaction was not sufficiently documented. Context: Out of six procurements which were tested, we noted that five of them, for which the District obtained quotes using the small purchase method, did not contain documentation detailing the history of the procurement, including any other quotes obtained. Questioned Costs: ALN 84.027 - $415,251.22. Cause: The district was unaware that they needed documentation for noncompetitive procurements as well as that their policy had a different micro-purchase threshold compared to what was in the UG. Effect: The District was not in compliance with the documentation requirements for procurement transactions as detailed in the Uniform Guidance. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the District 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.
B. FINDINGS - FINANCIAL STATEMENT AUDIT IC-2022-001: Financial Reporting (Material Weakness) Condition: Material misstatements within the financial statements were identified throughout the audit. Criteria: Management should have processes and procedures in place so as to be able to generate financial statements and reports that are complete and accurate on a timely basis and in accordance with generally accepted accounting principles (GAAP). Cause: The current size of the finance staffing of the County and School Board may not be sufficient to detect and prevent material errors. Effect: Financial statements and reports prepared in accordance with GAAP were not able to be generated accurately on a timely basis. Recommendation: We recommend that management re-evaluate the current staff structure and assignment of responsibilities in order to re-align roles and responsibilities with appropriate personnel or otherwise bolster their resource base so as to be able to meet the criteria. Views of Responsible Officials and Planned Corrective Action: See Corrective Action Plan. C. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAM AUDIT FA-2022-001: Procurement (Material Weakness) Condition: The School Board?s written procurement policies do not include policies that cover CFR ?200.318e, ?200.318f, ?200.318i, ?200.319b, ?200.319c, ?200.319d, ?200.319e, ?200.320a1, ?200,322, ?200.324b, ?200.326 and ?200.327. Criteria: Non-federal entities must follow the procurement standards set out at 2 CFR (Uniform Guidance) ?200.318 through ?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. Cause: The procurement policies for the School Board do not include the policies stated above, required by Uniform Guidance. Effect: The School Board?s policies do not comply with procurement requirements for federal awards (Uniform Guidance). Questioned Cost Amount: n/a Perspective Information: n/a Context: n/a Recommendation: Procurement policies should be reviewed and updated to be in compliance with the requirements identified in 2 CFR Part 200. Views of Responsible Officials and Planned Corrective Action: See Corrective Action Plan.
Department of Transportation, Federal Assistance Listing - 20.507 Grant Identification Number - CA-2020-076 Formula Grants ? Urbanized Area Formula Program Compliance Requirement ? Procurement, Suspension and Debarment Significant Deficiency in internal control over compliance and compliance Criteria: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326, including the micro-purchases and small purchase methods for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Condition: As part of compiling the Commission?s population for procurements, from which a procurement sample would be selected, the Commission identified $26,432 of expenditures charged to the grant that were erroneously included in SEFA, as the procurement methods were not eligible for federal expenditures. As a result, prior to us testing compliance related to procurement, the Commission reclassed the $26,432 of expenditures from the federal grant, and removed from the SEFA, as of June 30, 2022. Cause: The Commission?s procedures did not allow for timely identification of the expenditures prior to including on the SEFA (and claiming for reimbursement). Effect: A journal entry was posted to correct the current year federal revenue balance as of June 30, 2022 in the amount of $26,432. Further, the Commission has applied these expenditures to future draw downs in order to reverse the expenditures that were claimed. Questioned Costs: $26,432 of expenditures for two vendors. Context/Sampling: The condition was identified during the Commission?s preparation of the procurement population related to the grant for the year ended June 30, 2022. Repeat Finding from Prior Year: No Recommendation: We recommend that the Commission review its closing policies and procedures as well as its federal grant management procedures to ensure procurement methods are considered prior to claiming expenditures or reporting on the SEFA. Views of Responsible Official and Planned Corrective Actions: Management agrees. See separately issued Corrective Action Plan.
#2022-001 ? Uniform Guidance Procurement Standards Criteria: In accordance with 2 CFR sections 200.318 through 200.326 of the Uniform Guidance, Amistad, Inc. is required to have a documented purchasing policy, which at a minimum, incorporates the provisions of the Uniform Guidance. Condition: The OMB revised regulations applicable to federally funded programs are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the Organization has no formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Questioned Costs: None Context: The Organization has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not note any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards are not currently addressed in an official, written procurement policy. Cause: Staff turnover and management oversight. Repeat Finding: Yes Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and develop an appropriate written procurement policy. This would include incorporating definitions of the types of procurement (i.e. micro-purchases, small purchases, and small acquisition threshold) to match the language used in the Uniform Guidance procurement standards.
#2022-001 ? Uniform Guidance Procurement Standards Criteria: In accordance with 2 CFR sections 200.318 through 200.326 of the Uniform Guidance, Amistad, Inc. is required to have a documented purchasing policy, which at a minimum, incorporates the provisions of the Uniform Guidance. Condition: The OMB revised regulations applicable to federally funded programs are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the Organization has no formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Questioned Costs: None Context: The Organization has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not note any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards are not currently addressed in an official, written procurement policy. Cause: Staff turnover and management oversight. Repeat Finding: Yes Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and develop an appropriate written procurement policy. This would include incorporating definitions of the types of procurement (i.e. micro-purchases, small purchases, and small acquisition threshold) to match the language used in the Uniform Guidance procurement standards.
#2022-001 ? Uniform Guidance Procurement Standards Criteria: In accordance with 2 CFR sections 200.318 through 200.326 of the Uniform Guidance, Amistad, Inc. is required to have a documented purchasing policy, which at a minimum, incorporates the provisions of the Uniform Guidance. Condition: The OMB revised regulations applicable to federally funded programs are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the Organization has no formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Questioned Costs: None Context: The Organization has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not note any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards are not currently addressed in an official, written procurement policy. Cause: Staff turnover and management oversight. Repeat Finding: Yes Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and develop an appropriate written procurement policy. This would include incorporating definitions of the types of procurement (i.e. micro-purchases, small purchases, and small acquisition threshold) to match the language used in the Uniform Guidance procurement standards.
Finding 2022-001: Procurement Department of Housing and Urban Development Continuum of Care Program, Direct funding ? AL No. 14.267, Grant No. CA1320L9T142006 Department of Housing and Urban Development Continuum of Care Program, Direct funding ? AL No. 14.267, Grant No. CA0841L9T141908 Department of Housing and Urban Development Continuum of Care Program, Direct funding ? AL No. 14.267, Grant No. CA0773L9T142012 Department of Housing and Urban Development Continuum of Care Program, Direct funding ? AL No. 14.267, Grant No. CA1403L9T132005 Department of Housing and Urban Development Continuum of Care Program, Direct funding ? AL No. 14.267, Grant No. CA1317L9T132106 Department of Housing and Urban Development Continuum of Care Program, Passed-through County of Madera ? AL No. 14.267, Grant No. 11277A-20 Questioned Costs: None How the questioned costs were computed: N/A Condition: Wipfli obtained the supporting documentation for purchases of client furnishings, food, a vehicle, and lawn care services. The documentation indicated these vendors were selected based on best price. Turning Point of Central California, Inc. was able to provide explanations for why the vendors were selected, but procurement records supporting the explanations were not available. In addition, Wipfli noted Turning Point of Central California, Inc.?s procurement policy included references to outdated federal regulations and did not comply with all of the procurement requirements in the Uniform Guidance (2 CFR Part 200). This is a repeat finding from the June 30, 2021 audit. Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR Part 200, section 318(i) (Uniform Guidance) states that the non-Federal entity must maintain records sufficient to detail the history of procurement. The records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contractor type, contractor selection or rejection, and the basis for the contract price. In addition, the Uniform Guidance, 2 CFR Part 200, section 200.118 states that the non-Federal entity must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 and must use their own documented procurement procedures that must conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Cause: Turning Point of Central California, Inc. did not retain procurement records to support its assertion that it is contracting with vendors that provide the best prices. Turning Point of Central California, Inc. has not updated its procurement policy to comply with the Uniform Guidance (2 CFR Part 200). This finding was first reported in the June 30, 2021 audit, issued in June 2022, and Turning Point of Central California, Inc. did not have adequate time to implement its corrective action plan during the year ended June 30, 2022. Effect: Due to the conditions noted above, Turning Point of Central California, Inc. was not in compliance with the procurement regulations and there exists a material weakness in internal controls over the procurement compliance requirement. Recommendation: We recommend Turning Point of Central California, Inc. implement controls to ensure the procurement decisions are properly documented in accordance with updated internal policies and procedures that conform to the Uniform Guidance (2 CFR Part 200). View of responsible officials: Management agrees with the finding and has submitted a corrective action plan.
Finding 2022-001: Procurement Department of Housing and Urban Development Continuum of Care Program, Direct funding ? AL No. 14.267, Grant No. CA1320L9T142006 Department of Housing and Urban Development Continuum of Care Program, Direct funding ? AL No. 14.267, Grant No. CA0841L9T141908 Department of Housing and Urban Development Continuum of Care Program, Direct funding ? AL No. 14.267, Grant No. CA0773L9T142012 Department of Housing and Urban Development Continuum of Care Program, Direct funding ? AL No. 14.267, Grant No. CA1403L9T132005 Department of Housing and Urban Development Continuum of Care Program, Direct funding ? AL No. 14.267, Grant No. CA1317L9T132106 Department of Housing and Urban Development Continuum of Care Program, Passed-through County of Madera ? AL No. 14.267, Grant No. 11277A-20 Questioned Costs: None How the questioned costs were computed: N/A Condition: Wipfli obtained the supporting documentation for purchases of client furnishings, food, a vehicle, and lawn care services. The documentation indicated these vendors were selected based on best price. Turning Point of Central California, Inc. was able to provide explanations for why the vendors were selected, but procurement records supporting the explanations were not available. In addition, Wipfli noted Turning Point of Central California, Inc.?s procurement policy included references to outdated federal regulations and did not comply with all of the procurement requirements in the Uniform Guidance (2 CFR Part 200). This is a repeat finding from the June 30, 2021 audit. Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR Part 200, section 318(i) (Uniform Guidance) states that the non-Federal entity must maintain records sufficient to detail the history of procurement. The records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contractor type, contractor selection or rejection, and the basis for the contract price. In addition, the Uniform Guidance, 2 CFR Part 200, section 200.118 states that the non-Federal entity must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 and must use their own documented procurement procedures that must conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Cause: Turning Point of Central California, Inc. did not retain procurement records to support its assertion that it is contracting with vendors that provide the best prices. Turning Point of Central California, Inc. has not updated its procurement policy to comply with the Uniform Guidance (2 CFR Part 200). This finding was first reported in the June 30, 2021 audit, issued in June 2022, and Turning Point of Central California, Inc. did not have adequate time to implement its corrective action plan during the year ended June 30, 2022. Effect: Due to the conditions noted above, Turning Point of Central California, Inc. was not in compliance with the procurement regulations and there exists a material weakness in internal controls over the procurement compliance requirement. Recommendation: We recommend Turning Point of Central California, Inc. implement controls to ensure the procurement decisions are properly documented in accordance with updated internal policies and procedures that conform to the Uniform Guidance (2 CFR Part 200). View of responsible officials: Management agrees with the finding and has submitted a corrective action plan.
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Current Year Findings 2022-001: Material Weakness and Material Noncompliance ? Davis-Bacon Wage Rate Requirements Federal Assistance Listing Number 84.425D/84.425U/84.425W ? COVID-19 Education Stabilization Fund Passed-through Tennessee Department of Education Award Number S425D210047/S425D200047/S425U210047/S425W210044-21A Federal Assistance Listing Number 93.323 ? COVID-19 Epidemiology and Laboratory Capacity Grant Passed-through Tennessee Department of Health Award Number N/A Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147). Non-Federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the Non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In addition, according to 2 CFR Part 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: The School did not have internal controls in place to identify that certified payrolls were obtained from contractors on a weekly basis and reviewed in a timely manner. Education Stabilization Fund Cluster - the School did not obtain certified payrolls on a weekly basis for two out of five contractors selected for testing. Additionally, we noted one contractor did not sign the payroll reports which is required to complete the certification. The School also did not include wage requirement clauses in contract agreements (as specified in the above Criteria) for two out of the five contracts selected for testing. Epidemiology and Laboratory Capacity Grant - the School did not obtain certified payrolls on a weekly basis for one contractor under this grant. The School also did not include wage requirement clauses in the contract agreement (as specified in the above Criteria) for the one contract under this grant. Questioned Costs: Unknown. Effect: The School is not in compliance with Davis-Bacon requirements. Cause: The School was unaware of the requirements as it applied to the grants and as such, there was no assigned department or employee to monitor, review, and obtain certified payrolls and contracts during the year from contractors and subcontractors. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the School implement internal controls over wage rate requirements, including tracking certified payrolls or notification of no work performed and reviewing to help ensure wages are equal to or in excess of the prevailing wage rates. Views of Responsible Officials: Agree. See separate report for planned corrective actions. Prior Year Findings None reported
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Current Year Findings 2022-001: Material Weakness and Material Noncompliance ? Davis-Bacon Wage Rate Requirements Federal Assistance Listing Number 84.425D/84.425U/84.425W ? COVID-19 Education Stabilization Fund Passed-through Tennessee Department of Education Award Number S425D210047/S425D200047/S425U210047/S425W210044-21A Federal Assistance Listing Number 93.323 ? COVID-19 Epidemiology and Laboratory Capacity Grant Passed-through Tennessee Department of Health Award Number N/A Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147). Non-Federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the Non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In addition, according to 2 CFR Part 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: The School did not have internal controls in place to identify that certified payrolls were obtained from contractors on a weekly basis and reviewed in a timely manner. Education Stabilization Fund Cluster - the School did not obtain certified payrolls on a weekly basis for two out of five contractors selected for testing. Additionally, we noted one contractor did not sign the payroll reports which is required to complete the certification. The School also did not include wage requirement clauses in contract agreements (as specified in the above Criteria) for two out of the five contracts selected for testing. Epidemiology and Laboratory Capacity Grant - the School did not obtain certified payrolls on a weekly basis for one contractor under this grant. The School also did not include wage requirement clauses in the contract agreement (as specified in the above Criteria) for the one contract under this grant. Questioned Costs: Unknown. Effect: The School is not in compliance with Davis-Bacon requirements. Cause: The School was unaware of the requirements as it applied to the grants and as such, there was no assigned department or employee to monitor, review, and obtain certified payrolls and contracts during the year from contractors and subcontractors. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the School implement internal controls over wage rate requirements, including tracking certified payrolls or notification of no work performed and reviewing to help ensure wages are equal to or in excess of the prevailing wage rates. Views of Responsible Officials: Agree. See separate report for planned corrective actions. Prior Year Findings None reported
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Current Year Findings 2022-001: Material Weakness and Material Noncompliance ? Davis-Bacon Wage Rate Requirements Federal Assistance Listing Number 84.425D/84.425U/84.425W ? COVID-19 Education Stabilization Fund Passed-through Tennessee Department of Education Award Number S425D210047/S425D200047/S425U210047/S425W210044-21A Federal Assistance Listing Number 93.323 ? COVID-19 Epidemiology and Laboratory Capacity Grant Passed-through Tennessee Department of Health Award Number N/A Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147). Non-Federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the Non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In addition, according to 2 CFR Part 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: The School did not have internal controls in place to identify that certified payrolls were obtained from contractors on a weekly basis and reviewed in a timely manner. Education Stabilization Fund Cluster - the School did not obtain certified payrolls on a weekly basis for two out of five contractors selected for testing. Additionally, we noted one contractor did not sign the payroll reports which is required to complete the certification. The School also did not include wage requirement clauses in contract agreements (as specified in the above Criteria) for two out of the five contracts selected for testing. Epidemiology and Laboratory Capacity Grant - the School did not obtain certified payrolls on a weekly basis for one contractor under this grant. The School also did not include wage requirement clauses in the contract agreement (as specified in the above Criteria) for the one contract under this grant. Questioned Costs: Unknown. Effect: The School is not in compliance with Davis-Bacon requirements. Cause: The School was unaware of the requirements as it applied to the grants and as such, there was no assigned department or employee to monitor, review, and obtain certified payrolls and contracts during the year from contractors and subcontractors. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the School implement internal controls over wage rate requirements, including tracking certified payrolls or notification of no work performed and reviewing to help ensure wages are equal to or in excess of the prevailing wage rates. Views of Responsible Officials: Agree. See separate report for planned corrective actions. Prior Year Findings None reported
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Current Year Findings 2022-001: Material Weakness and Material Noncompliance ? Davis-Bacon Wage Rate Requirements Federal Assistance Listing Number 84.425D/84.425U/84.425W ? COVID-19 Education Stabilization Fund Passed-through Tennessee Department of Education Award Number S425D210047/S425D200047/S425U210047/S425W210044-21A Federal Assistance Listing Number 93.323 ? COVID-19 Epidemiology and Laboratory Capacity Grant Passed-through Tennessee Department of Health Award Number N/A Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147). Non-Federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the Non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In addition, according to 2 CFR Part 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: The School did not have internal controls in place to identify that certified payrolls were obtained from contractors on a weekly basis and reviewed in a timely manner. Education Stabilization Fund Cluster - the School did not obtain certified payrolls on a weekly basis for two out of five contractors selected for testing. Additionally, we noted one contractor did not sign the payroll reports which is required to complete the certification. The School also did not include wage requirement clauses in contract agreements (as specified in the above Criteria) for two out of the five contracts selected for testing. Epidemiology and Laboratory Capacity Grant - the School did not obtain certified payrolls on a weekly basis for one contractor under this grant. The School also did not include wage requirement clauses in the contract agreement (as specified in the above Criteria) for the one contract under this grant. Questioned Costs: Unknown. Effect: The School is not in compliance with Davis-Bacon requirements. Cause: The School was unaware of the requirements as it applied to the grants and as such, there was no assigned department or employee to monitor, review, and obtain certified payrolls and contracts during the year from contractors and subcontractors. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the School implement internal controls over wage rate requirements, including tracking certified payrolls or notification of no work performed and reviewing to help ensure wages are equal to or in excess of the prevailing wage rates. Views of Responsible Officials: Agree. See separate report for planned corrective actions. Prior Year Findings None reported
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Current Year Findings 2022-001: Material Weakness ? Davis-Bacon Wage Rate Requirements Federal Assistance Listing Number 84.425D/84.425U/84.425W ? COVID-19 Education Stabilization Fund Passed-through Tennessee Department of Education Award Number S425D210047/S425D200047/S425D2000047/S425U210047/S425W210044-21A Federal Assistance Listing Number 93.323 ? COVID-19 Epidemiology and Laboratory Capacity Grant Passed-through Tennessee Department of Health Award Number N/A Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147). Non-Federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the Non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In addition, according to 2 CFR Part 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: The School did not have internal controls in place to identify that certified payrolls were obtained from contractors on a weekly basis and reviewed in a timely manner. Education Stabilization Fund Cluster - the School did not obtain certified payrolls on a weekly basis for two out of two contractors selected for testing. Additionally, we noted one contractor did not sign the payroll reports, which is required to complete the certification, prior to the audit. Epidemiology and Laboratory Capacity Grant - the School did not obtain certified payrolls on a weekly basis for three contractors under this grant. The School also did not include wage requirement clauses in the contract agreement (as specified in the above Criteria) for the one contract under this grant. Additionally, we noted two contractors did not sign the payroll reports, which is required to complete the certification, prior to the audit. Questioned Costs: Unknown. Effect: The School is not in compliance with Davis-Bacon requirements. Cause: The School was unaware of the requirements as it applied to the grants and as such, there was no assigned department or employee to monitor, review, and obtain certified payrolls and contracts during the year from contractors and subcontractors. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the School implement internal controls over wage rate requirements, including tracking certified payrolls or notification of no work performed and reviewing to help ensure wages are equal to or in excess of the prevailing wage rates. Views of Responsible Officials: Agree. See separate report for planned corrective actions. Prior Year Findings None reported
Department of Education COVID-19 Higher Education Emergency Relief Fund (HEERF) ? Assistance Listing #84.425E, #84.425F #2022-002 ? Major Federal Award Finding ? Procurement and Suspension and Debarment Material Weakness in Internal Controls over Compliance Conditions: We noted during testing of procurement for the HEERF program (Institutional Portion) that the University?s procurement policy was not being followed. Multiple price quotations were not obtained for projects over the micro purchase threshold, and competitive bids were not obtained for projects over the simplified acquisition threshold. Criteria: Federal regulations 2 CFR Section 200.317- 200.326 provide that the University must have and use documented procurement procedures and follow written standards that promote full and open vendor competition. Methods included in written standards covering the acquisition of property or services under a Federal award or sub-award must be consistent with specific thresholds as set forth in CFR 200.320. There are five allowable procurement methods described in ?200.320, depending upon the dollar value of the purchase or contract. Cause/Context: We tested five transactions over the micro purchase threshold. None of these transactions were subject to the procurement processes required by the Uniform Guidance as it relates to price quotations and/or competitive bids. Recommendation: Management should review the University?s procurement policy and update appropriately to reference Uniform Guidance and specific purchasing thresholds. The University should ensure that it follows the requirements outlined in its procurement policy in accordance with the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Finding has been reviewed and addressed. See attached Corrective Action Plan.
Department of Education COVID-19 Higher Education Emergency Relief Fund (HEERF) ? Assistance Listing #84.425E, #84.425F #2022-002 ? Major Federal Award Finding ? Procurement and Suspension and Debarment Material Weakness in Internal Controls over Compliance Conditions: We noted during testing of procurement for the HEERF program (Institutional Portion) that the University?s procurement policy was not being followed. Multiple price quotations were not obtained for projects over the micro purchase threshold, and competitive bids were not obtained for projects over the simplified acquisition threshold. Criteria: Federal regulations 2 CFR Section 200.317- 200.326 provide that the University must have and use documented procurement procedures and follow written standards that promote full and open vendor competition. Methods included in written standards covering the acquisition of property or services under a Federal award or sub-award must be consistent with specific thresholds as set forth in CFR 200.320. There are five allowable procurement methods described in ?200.320, depending upon the dollar value of the purchase or contract. Cause/Context: We tested five transactions over the micro purchase threshold. None of these transactions were subject to the procurement processes required by the Uniform Guidance as it relates to price quotations and/or competitive bids. Recommendation: Management should review the University?s procurement policy and update appropriately to reference Uniform Guidance and specific purchasing thresholds. The University should ensure that it follows the requirements outlined in its procurement policy in accordance with the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Finding has been reviewed and addressed. See attached Corrective Action Plan.
U.S. Department of Housing and Urban Development SIGNIFICANT DEFICIENCY 2022-003: Continuum of Care Program CFDA 14.267 Grant period: Year Ended June 30, 2022 Condition and Context: The Organization does not have a 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). Criteria: In accordance with 2 CFR Section 200.319(c), non-federal entities must have written procedures for procurement transactions. Such policy should incorporate all requirements within 2 CFR 200.318 through 200.326 of the Uniform Guidance. Cause: The Organization?s procurement policy does not incorporate all the requirements of 2 CFR Section 200.318 through 200.326 of the Uniform Guidance. Effect: An important component of internal controls is the existence of operating policies and procedures that are clearly understood and communicated. Without clear written policies and procedures, there is a higher risk of noncompliance with program compliance requirements. Recommendation: Management should continue to develop comprehensive written policies and procedures to administer all federal programs. Current written policies should be evaluated for inclusion of and compliance with the Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will adopt written policies to comply with the Uniform Guidance requirements.
U.S. Department of Housing and Urban Development SIGNIFICANT DEFICIENCY 2022-003: Continuum of Care Program CFDA 14.267 Grant period: Year Ended June 30, 2022 Condition and Context: The Organization does not have a 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). Criteria: In accordance with 2 CFR Section 200.319(c), non-federal entities must have written procedures for procurement transactions. Such policy should incorporate all requirements within 2 CFR 200.318 through 200.326 of the Uniform Guidance. Cause: The Organization?s procurement policy does not incorporate all the requirements of 2 CFR Section 200.318 through 200.326 of the Uniform Guidance. Effect: An important component of internal controls is the existence of operating policies and procedures that are clearly understood and communicated. Without clear written policies and procedures, there is a higher risk of noncompliance with program compliance requirements. Recommendation: Management should continue to develop comprehensive written policies and procedures to administer all federal programs. Current written policies should be evaluated for inclusion of and compliance with the Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will adopt written policies to comply with the Uniform Guidance requirements.
Finding 2022-001 Procurement Policy Criteria: Non-Federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors? performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $3,500 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(c); the competitive proposals method under the conditions specified in 2 CFR section 200.320(d); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(f). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(d)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR part 200, ?Contract Provisions for Non- Federal Entity Contracts Under Federal Awards.? Non-federal entities had a grace period of two full fiscal years after the effective date of the Uniform Guidance before they had to comply with the procurement requirements of 2 CFR section 200. For a non-federal entity with a fiscal year-end of June 30, its effective date for the procurement requirements was July 1, 2017. However, during this grace period, non-federal entities were required to clearly document whether they decided to comply with the previous version of the applicable procurement standards or the new standards contained in the Uniform Guidance. Condition: The City has not updated its purchasing policies and procedures to bring it into compliance with the requirements of Uniform Guidance. The City has also not formally documented whether it has decided to extend its applicable date of compliance with 2 CFR part 200 to be effective beginning July 1, 2018. The City is not in compliance with the procurement policy provisions of 2 CFR part 200 and the Uniform Guidance. Not updating the City?s procurement policy could lead to future findings and questioned costs related to federal awards. The current audit did not identify noncompliance with direct and material compliance requirements of the major federal award program. The City has not updated its purchasing policies and procedures to bring it into compliance with the requirements of Uniform Guidance. The City has also not formally documented whether it has decided to extend its applicable date of compliance with 2 CFR part 200 to be effective beginning July 1, 2018. Context: See condition above for context of the finding. Cause: The City has not evaluated its existing procurement policies for compliance with the requirements of the Uniform Guidance. Effect: The City is not in compliance with the procurement policy provisions of 2 CFR part 200 and the Uniform Guidance. Not updating the City?s procurement policy could lead to future findings and questioned costs related to federal awards. The current audit did not identify noncompliance with direct and material compliance requirements of the major federal award program. Identification as a Repeat Finding: Yes. 2021-001. Recommendation: The City should evaluate and update existing purchasing policies and procedures in order to bring the City into compliance with the procurement policy requirements of 2 CFR part 200 and the Uniform Guidance. The updated policy should include, among other things: 1. Thresholds and appropriate approval procedures for allowable federal procurement methods. 2. Written standards for how conflicts of interest involving employees engaged to select, award, and administer contracts will be governed. 3. How to ensure that contracts and awards are made only to responsible and eligible contractors and how oversight of contractor performance will be monitored. 4. How records will be maintained in order to document the history of federal procurements. Views of Responsible Officials: The City is still in the process of working with an outside firm on a review of procurement and purchasing policies. The consultation includes compliance review of this standard. Expected completion ? FYE 2023.
Finding 2022-001 Procurement Policy Criteria: Non-Federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors? performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $3,500 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(c); the competitive proposals method under the conditions specified in 2 CFR section 200.320(d); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(f). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(d)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR part 200, ?Contract Provisions for Non- Federal Entity Contracts Under Federal Awards.? Non-federal entities had a grace period of two full fiscal years after the effective date of the Uniform Guidance before they had to comply with the procurement requirements of 2 CFR section 200. For a non-federal entity with a fiscal year-end of June 30, its effective date for the procurement requirements was July 1, 2017. However, during this grace period, non-federal entities were required to clearly document whether they decided to comply with the previous version of the applicable procurement standards or the new standards contained in the Uniform Guidance. Condition: The City has not updated its purchasing policies and procedures to bring it into compliance with the requirements of Uniform Guidance. The City has also not formally documented whether it has decided to extend its applicable date of compliance with 2 CFR part 200 to be effective beginning July 1, 2018. The City is not in compliance with the procurement policy provisions of 2 CFR part 200 and the Uniform Guidance. Not updating the City?s procurement policy could lead to future findings and questioned costs related to federal awards. The current audit did not identify noncompliance with direct and material compliance requirements of the major federal award program. The City has not updated its purchasing policies and procedures to bring it into compliance with the requirements of Uniform Guidance. The City has also not formally documented whether it has decided to extend its applicable date of compliance with 2 CFR part 200 to be effective beginning July 1, 2018. Context: See condition above for context of the finding. Cause: The City has not evaluated its existing procurement policies for compliance with the requirements of the Uniform Guidance. Effect: The City is not in compliance with the procurement policy provisions of 2 CFR part 200 and the Uniform Guidance. Not updating the City?s procurement policy could lead to future findings and questioned costs related to federal awards. The current audit did not identify noncompliance with direct and material compliance requirements of the major federal award program. Identification as a Repeat Finding: Yes. 2021-001. Recommendation: The City should evaluate and update existing purchasing policies and procedures in order to bring the City into compliance with the procurement policy requirements of 2 CFR part 200 and the Uniform Guidance. The updated policy should include, among other things: 1. Thresholds and appropriate approval procedures for allowable federal procurement methods. 2. Written standards for how conflicts of interest involving employees engaged to select, award, and administer contracts will be governed. 3. How to ensure that contracts and awards are made only to responsible and eligible contractors and how oversight of contractor performance will be monitored. 4. How records will be maintained in order to document the history of federal procurements. Views of Responsible Officials: The City is still in the process of working with an outside firm on a review of procurement and purchasing policies. The consultation includes compliance review of this standard. Expected completion ? FYE 2023.
Finding 2022-001 Procurement Policy Criteria: Non-Federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors? performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $3,500 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(c); the competitive proposals method under the conditions specified in 2 CFR section 200.320(d); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(f). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(d)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR part 200, ?Contract Provisions for Non- Federal Entity Contracts Under Federal Awards.? Non-federal entities had a grace period of two full fiscal years after the effective date of the Uniform Guidance before they had to comply with the procurement requirements of 2 CFR section 200. For a non-federal entity with a fiscal year-end of June 30, its effective date for the procurement requirements was July 1, 2017. However, during this grace period, non-federal entities were required to clearly document whether they decided to comply with the previous version of the applicable procurement standards or the new standards contained in the Uniform Guidance. Condition: The City has not updated its purchasing policies and procedures to bring it into compliance with the requirements of Uniform Guidance. The City has also not formally documented whether it has decided to extend its applicable date of compliance with 2 CFR part 200 to be effective beginning July 1, 2018. The City is not in compliance with the procurement policy provisions of 2 CFR part 200 and the Uniform Guidance. Not updating the City?s procurement policy could lead to future findings and questioned costs related to federal awards. The current audit did not identify noncompliance with direct and material compliance requirements of the major federal award program. The City has not updated its purchasing policies and procedures to bring it into compliance with the requirements of Uniform Guidance. The City has also not formally documented whether it has decided to extend its applicable date of compliance with 2 CFR part 200 to be effective beginning July 1, 2018. Context: See condition above for context of the finding. Cause: The City has not evaluated its existing procurement policies for compliance with the requirements of the Uniform Guidance. Effect: The City is not in compliance with the procurement policy provisions of 2 CFR part 200 and the Uniform Guidance. Not updating the City?s procurement policy could lead to future findings and questioned costs related to federal awards. The current audit did not identify noncompliance with direct and material compliance requirements of the major federal award program. Identification as a Repeat Finding: Yes. 2021-001. Recommendation: The City should evaluate and update existing purchasing policies and procedures in order to bring the City into compliance with the procurement policy requirements of 2 CFR part 200 and the Uniform Guidance. The updated policy should include, among other things: 1. Thresholds and appropriate approval procedures for allowable federal procurement methods. 2. Written standards for how conflicts of interest involving employees engaged to select, award, and administer contracts will be governed. 3. How to ensure that contracts and awards are made only to responsible and eligible contractors and how oversight of contractor performance will be monitored. 4. How records will be maintained in order to document the history of federal procurements. Views of Responsible Officials: The City is still in the process of working with an outside firm on a review of procurement and purchasing policies. The consultation includes compliance review of this standard. Expected completion ? FYE 2023.
Finding 2022-001 Procurement Policy Criteria: Non-Federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors? performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $3,500 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(c); the competitive proposals method under the conditions specified in 2 CFR section 200.320(d); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(f). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(d)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR part 200, ?Contract Provisions for Non- Federal Entity Contracts Under Federal Awards.? Non-federal entities had a grace period of two full fiscal years after the effective date of the Uniform Guidance before they had to comply with the procurement requirements of 2 CFR section 200. For a non-federal entity with a fiscal year-end of June 30, its effective date for the procurement requirements was July 1, 2017. However, during this grace period, non-federal entities were required to clearly document whether they decided to comply with the previous version of the applicable procurement standards or the new standards contained in the Uniform Guidance. Condition: The City has not updated its purchasing policies and procedures to bring it into compliance with the requirements of Uniform Guidance. The City has also not formally documented whether it has decided to extend its applicable date of compliance with 2 CFR part 200 to be effective beginning July 1, 2018. The City is not in compliance with the procurement policy provisions of 2 CFR part 200 and the Uniform Guidance. Not updating the City?s procurement policy could lead to future findings and questioned costs related to federal awards. The current audit did not identify noncompliance with direct and material compliance requirements of the major federal award program. The City has not updated its purchasing policies and procedures to bring it into compliance with the requirements of Uniform Guidance. The City has also not formally documented whether it has decided to extend its applicable date of compliance with 2 CFR part 200 to be effective beginning July 1, 2018. Context: See condition above for context of the finding. Cause: The City has not evaluated its existing procurement policies for compliance with the requirements of the Uniform Guidance. Effect: The City is not in compliance with the procurement policy provisions of 2 CFR part 200 and the Uniform Guidance. Not updating the City?s procurement policy could lead to future findings and questioned costs related to federal awards. The current audit did not identify noncompliance with direct and material compliance requirements of the major federal award program. Identification as a Repeat Finding: Yes. 2021-001. Recommendation: The City should evaluate and update existing purchasing policies and procedures in order to bring the City into compliance with the procurement policy requirements of 2 CFR part 200 and the Uniform Guidance. The updated policy should include, among other things: 1. Thresholds and appropriate approval procedures for allowable federal procurement methods. 2. Written standards for how conflicts of interest involving employees engaged to select, award, and administer contracts will be governed. 3. How to ensure that contracts and awards are made only to responsible and eligible contractors and how oversight of contractor performance will be monitored. 4. How records will be maintained in order to document the history of federal procurements. Views of Responsible Officials: The City is still in the process of working with an outside firm on a review of procurement and purchasing policies. The consultation includes compliance review of this standard. Expected completion ? FYE 2023.
Finding 2022-002?Procurement Program: Protecting and Improving Health Globally: Building and Strengthening Public Health Impact, Systems, Capacity and Security Assistance Listing No.: 93.318 Federal Award Number: NU50CK000584 Federal Award Year: 2021, 2022 Type of Finding: Material weakness and material instance of noncompliance Criteria: Per 2 CFR 200.303, the Council must establish and maintain effective internal controls over federal awards that provide reasonable assurance that it is managing federal awards in compliance with federal statutes, regulations and provisions of contracts or grant agreements that could have a material effect on each of its federal programs. Non-federal entities other than states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. Entities 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 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). 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 good and services awarded under non-procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. Condition: The Council did not retain documentation or other evidence that the procurement process was performed for certain program expenditures during the year. Cause: Control procedures did not function as designed and thus compliance with procurement requirements was not followed. Effect: Not performing the procurement process increases the risk of noncompliance with rules and regulations. Questioned costs: None known Context: We selected three transactions to test controls and compliance over small purchases and noted there was no support for procurement compliance or controls over compliance for these three transactions. Repeat finding: No Recommendation: We recommend management review, revise, and test current control procedures and make any necessary changes to ensure compliance with criteria above. View of responsible officials: Management concurs with the finding. See corrective action plan.
U.S. Department of Education Program Name: Education Stabilization Fund AL No. 84.425 MATERIAL WEAKNESS 2022-002 SPECIAL TESTS AND PROVISIONS Criteria: Per the 2022 OMB Compliance Supplement, ?All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147). Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326).? Condition: During our testing of the District?s Education Stabilization Fund, we noted the District had a contract for security equipment installation that was subject to the prevailing wage rate requirements under 20 USC 1232b; however, the contractor did not pay prevailing wages on labor costs of $56,749 on this contract. Questioned Costs: $56,749 Context: We noted that the District?s security equipment contractor did not pay prevailing wages as required by the Department of Labor for federally-financed contracts. Cause: The District was unaware that the equipment installation was subject to prevailing wage rate requirements. Effect: The District did not comply with the prevailing wage requirements for the above contract. Recommendation: We recommend that the District review the requirements related to expenditure of federal funds on construction contracts. Response: The District was unaware of the prevailing wage requirements for federally financed contracts in excess of $2,000. The District has pursued education on the federal requirements regarding prevailing wage, and will make steps moving forward to ensure compliance with the federal standards relating to prevailing wage of federally financed contracts.
2 CFR part 200 Appendix II requires all laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). This reporting is often done using Optional Form WH-347, which includes the required statement of compliance (OMB No. 1235-0008). The DOL, Employment Standards Administration, maintains a Davis-Bacon and Related Acts web page (https://www.dol.gov/agencies/whd/government-contracts/construction). The District did not obtain the required certified payroll reports for a construction contract in excess of $2,000. In addition, the contract did not contain a provision to comply with wage rate requirements. The contract cost was $30,206. The District should include prevailing wage provisions in all construction contracts or agreements involving federal funds exceeding $2,000. The District should obtain weekly certified payroll reports from the contractor.
2 CFR part 200 Appendix II requires all laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). This reporting is often done using Optional Form WH-347, which includes the required statement of compliance (OMB No. 1235-0008). The DOL, Employment Standards Administration, maintains a Davis-Bacon and Related Acts web page (https://www.dol.gov/agencies/whd/government-contracts/construction). The District did not obtain the required certified payroll reports for a construction contract in excess of $2,000. In addition, the contract did not contain a provision to comply with wage rate requirements. The contract cost was $30,206. The District should include prevailing wage provisions in all construction contracts or agreements involving federal funds exceeding $2,000. The District should obtain weekly certified payroll reports from the contractor.
2022-004 ? Special Provisions ? Wage Rate Requirements Federal agency: U.S. Department of Education Federal program title: Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U and 84.425W Pass-Through Agency: Minnesota Department of Education Pass-Through Number(s): S425C210015 and S425D210045 Award Period: July 1, 2021 - June 30, 2022 Type of Finding: ? Significant deficiency in internal control over compliance Criteria or Specific Requirement: Per 29 CFR Part 5, 2 CFR Part 176, subpart C and 2 CFR section 200.326, the District is required to include in their construction contract subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the Department of Labor regulations. This includes a requirement for the contractor or subcontractor to submit the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance. Condition: During special provisions testing, it was noted that the District has the correct wording relating to the wage rate requirements in the contracts but did not obtain any documentation from the contractor ensuring that the contractor was following the wage rate requirements. Questioned Costs: Not applicable. Context: 1 out of 1 contractor selected has the proper wording relating to the Wage Rate Requirements in the contract but the District does not receive any documentation verifying the compliance. Cause: Oversight. Effect: Lack of proper documentation of controls over compliance with special provision requirements could result in paying contractors that are not in compliance with the Wage Rate Requirements set by the Department of Labor. This could ultimately result in questioned costs. Repeat Finding: Not applicable. Recommendation: We recommend that the District obtain the weekly payrolls and statement of compliance from contractors that work on construction contracts financed by federal assistance funds. Views of Responsible Official: There is no disagreement with the finding.
2022-004 ? Special Provisions ? Wage Rate Requirements Federal agency: U.S. Department of Education Federal program title: Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U and 84.425W Pass-Through Agency: Minnesota Department of Education Pass-Through Number(s): S425C210015 and S425D210045 Award Period: July 1, 2021 - June 30, 2022 Type of Finding: ? Significant deficiency in internal control over compliance Criteria or Specific Requirement: Per 29 CFR Part 5, 2 CFR Part 176, subpart C and 2 CFR section 200.326, the District is required to include in their construction contract subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the Department of Labor regulations. This includes a requirement for the contractor or subcontractor to submit the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance. Condition: During special provisions testing, it was noted that the District has the correct wording relating to the wage rate requirements in the contracts but did not obtain any documentation from the contractor ensuring that the contractor was following the wage rate requirements. Questioned Costs: Not applicable. Context: 1 out of 1 contractor selected has the proper wording relating to the Wage Rate Requirements in the contract but the District does not receive any documentation verifying the compliance. Cause: Oversight. Effect: Lack of proper documentation of controls over compliance with special provision requirements could result in paying contractors that are not in compliance with the Wage Rate Requirements set by the Department of Labor. This could ultimately result in questioned costs. Repeat Finding: Not applicable. Recommendation: We recommend that the District obtain the weekly payrolls and statement of compliance from contractors that work on construction contracts financed by federal assistance funds. Views of Responsible Official: There is no disagreement with the finding.
2022-004 ? Special Provisions ? Wage Rate Requirements Federal agency: U.S. Department of Education Federal program title: Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U and 84.425W Pass-Through Agency: Minnesota Department of Education Pass-Through Number(s): S425C210015 and S425D210045 Award Period: July 1, 2021 - June 30, 2022 Type of Finding: ? Significant deficiency in internal control over compliance Criteria or Specific Requirement: Per 29 CFR Part 5, 2 CFR Part 176, subpart C and 2 CFR section 200.326, the District is required to include in their construction contract subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the Department of Labor regulations. This includes a requirement for the contractor or subcontractor to submit the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance. Condition: During special provisions testing, it was noted that the District has the correct wording relating to the wage rate requirements in the contracts but did not obtain any documentation from the contractor ensuring that the contractor was following the wage rate requirements. Questioned Costs: Not applicable. Context: 1 out of 1 contractor selected has the proper wording relating to the Wage Rate Requirements in the contract but the District does not receive any documentation verifying the compliance. Cause: Oversight. Effect: Lack of proper documentation of controls over compliance with special provision requirements could result in paying contractors that are not in compliance with the Wage Rate Requirements set by the Department of Labor. This could ultimately result in questioned costs. Repeat Finding: Not applicable. Recommendation: We recommend that the District obtain the weekly payrolls and statement of compliance from contractors that work on construction contracts financed by federal assistance funds. Views of Responsible Official: There is no disagreement with the finding.
2022-004 ? Special Provisions ? Wage Rate Requirements Federal agency: U.S. Department of Education Federal program title: Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U and 84.425W Pass-Through Agency: Minnesota Department of Education Pass-Through Number(s): S425C210015 and S425D210045 Award Period: July 1, 2021 - June 30, 2022 Type of Finding: ? Significant deficiency in internal control over compliance Criteria or Specific Requirement: Per 29 CFR Part 5, 2 CFR Part 176, subpart C and 2 CFR section 200.326, the District is required to include in their construction contract subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the Department of Labor regulations. This includes a requirement for the contractor or subcontractor to submit the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance. Condition: During special provisions testing, it was noted that the District has the correct wording relating to the wage rate requirements in the contracts but did not obtain any documentation from the contractor ensuring that the contractor was following the wage rate requirements. Questioned Costs: Not applicable. Context: 1 out of 1 contractor selected has the proper wording relating to the Wage Rate Requirements in the contract but the District does not receive any documentation verifying the compliance. Cause: Oversight. Effect: Lack of proper documentation of controls over compliance with special provision requirements could result in paying contractors that are not in compliance with the Wage Rate Requirements set by the Department of Labor. This could ultimately result in questioned costs. Repeat Finding: Not applicable. Recommendation: We recommend that the District obtain the weekly payrolls and statement of compliance from contractors that work on construction contracts financed by federal assistance funds. Views of Responsible Official: There is no disagreement with the finding.
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Current Year Findings 2022-001: Material Weakness ? Davis-Bacon Wage Rate Requirements Federal Assistance Listing Number 84.425D/84.425U/84.425W ? COVID-19 Education Stabilization Fund Passed-through Tennessee Department of Education Award Number S425D210047/S425D200047/S425D2000047/S425U210047/S425W210044-21A Federal Assistance Listing Number 93.323 ? COVID-19 Epidemiology and Laboratory Capacity Grant Passed-through Tennessee Department of Health Award Number N/A Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147). Non-Federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the Non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In addition, according to 2 CFR Part 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: The School did not have internal controls in place to identify that certified payrolls were obtained from contractors on a weekly basis and reviewed in a timely manner. Education Stabilization Fund Cluster - the School did not obtain certified payrolls on a weekly basis for two out of two contractors selected for testing. Additionally, we noted one contractor did not sign the payroll reports, which is required to complete the certification, prior to the audit. Epidemiology and Laboratory Capacity Grant - the School did not obtain certified payrolls on a weekly basis for three contractors under this grant. The School also did not include wage requirement clauses in the contract agreement (as specified in the above Criteria) for the one contract under this grant. Additionally, we noted two contractors did not sign the payroll reports, which is required to complete the certification, prior to the audit. Questioned Costs: Unknown. Effect: The School is not in compliance with Davis-Bacon requirements. Cause: The School was unaware of the requirements as it applied to the grants and as such, there was no assigned department or employee to monitor, review, and obtain certified payrolls and contracts during the year from contractors and subcontractors. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the School implement internal controls over wage rate requirements, including tracking certified payrolls or notification of no work performed and reviewing to help ensure wages are equal to or in excess of the prevailing wage rates. Views of Responsible Officials: Agree. See separate report for planned corrective actions. Prior Year Findings None reported
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Current Year Findings 2022-001: Material Weakness ? Davis-Bacon Wage Rate Requirements Federal Assistance Listing Number 84.425D/84.425U/84.425W ? COVID-19 Education Stabilization Fund Passed-through Tennessee Department of Education Award Number S425D210047/S425D200047/S425D2000047/S425U210047/S425W210044-21A Federal Assistance Listing Number 93.323 ? COVID-19 Epidemiology and Laboratory Capacity Grant Passed-through Tennessee Department of Health Award Number N/A Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147). Non-Federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the Non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In addition, according to 2 CFR Part 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: The School did not have internal controls in place to identify that certified payrolls were obtained from contractors on a weekly basis and reviewed in a timely manner. Education Stabilization Fund Cluster - the School did not obtain certified payrolls on a weekly basis for two out of two contractors selected for testing. Additionally, we noted one contractor did not sign the payroll reports, which is required to complete the certification, prior to the audit. Epidemiology and Laboratory Capacity Grant - the School did not obtain certified payrolls on a weekly basis for three contractors under this grant. The School also did not include wage requirement clauses in the contract agreement (as specified in the above Criteria) for the one contract under this grant. Additionally, we noted two contractors did not sign the payroll reports, which is required to complete the certification, prior to the audit. Questioned Costs: Unknown. Effect: The School is not in compliance with Davis-Bacon requirements. Cause: The School was unaware of the requirements as it applied to the grants and as such, there was no assigned department or employee to monitor, review, and obtain certified payrolls and contracts during the year from contractors and subcontractors. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the School implement internal controls over wage rate requirements, including tracking certified payrolls or notification of no work performed and reviewing to help ensure wages are equal to or in excess of the prevailing wage rates. Views of Responsible Officials: Agree. See separate report for planned corrective actions. Prior Year Findings None reported
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Current Year Findings 2022-001: Material Weakness ? Davis-Bacon Wage Rate Requirements Federal Assistance Listing Number 84.425D/84.425U/84.425W ? COVID-19 Education Stabilization Fund Passed-through Tennessee Department of Education Award Number S425D210047/S425D200047/S425D2000047/S425U210047/S425W210044-21A Federal Assistance Listing Number 93.323 ? COVID-19 Epidemiology and Laboratory Capacity Grant Passed-through Tennessee Department of Health Award Number N/A Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147). Non-Federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the Non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In addition, according to 2 CFR Part 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: The School did not have internal controls in place to identify that certified payrolls were obtained from contractors on a weekly basis and reviewed in a timely manner. Education Stabilization Fund Cluster - the School did not obtain certified payrolls on a weekly basis for two out of two contractors selected for testing. Additionally, we noted one contractor did not sign the payroll reports, which is required to complete the certification, prior to the audit. Epidemiology and Laboratory Capacity Grant - the School did not obtain certified payrolls on a weekly basis for three contractors under this grant. The School also did not include wage requirement clauses in the contract agreement (as specified in the above Criteria) for the one contract under this grant. Additionally, we noted two contractors did not sign the payroll reports, which is required to complete the certification, prior to the audit. Questioned Costs: Unknown. Effect: The School is not in compliance with Davis-Bacon requirements. Cause: The School was unaware of the requirements as it applied to the grants and as such, there was no assigned department or employee to monitor, review, and obtain certified payrolls and contracts during the year from contractors and subcontractors. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the School implement internal controls over wage rate requirements, including tracking certified payrolls or notification of no work performed and reviewing to help ensure wages are equal to or in excess of the prevailing wage rates. Views of Responsible Officials: Agree. See separate report for planned corrective actions. Prior Year Findings None reported
2022-01 Prevailing Wage Rate Internal Control and Compliance CFDA Number: 84.425D Federal Award Number: 036-0648-92-2021 Federal Agency: U.S. Department of Education Pass-through Entity: Montana Office of Public Instruction Condition: The District did not require a contract indicating the requirement of prevailing wage rate and weekly certified payrolls submitted for federal construction project with contractor. Context: During the testing of expenditures for the ESSER projects we noted construction projects with labor in excess of $2,000. Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141--3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Effect: The District was not in compliance with the prevailing wage rate requirement and the internal control system of the District did not identify the need for the compliance. Cause: Internal control procedures were not in place to ensure a contract was draw up to include the prevailing wage rate clause and to ensure the weekly certified payrolls were submitted to the District. Recommendation: The District should implement internal control procedures for any construction contracts in excess of $2,000 funded with federal monies include a contract with the prevailing wage rate clause and submission of weekly certified payrolls.
2022-01 Prevailing Wage Rate Internal Control and Compliance CFDA Number: 84.425D Federal Award Number: 036-0648-92-2021 Federal Agency: U.S. Department of Education Pass-through Entity: Montana Office of Public Instruction Condition: The District did not require a contract indicating the requirement of prevailing wage rate and weekly certified payrolls submitted for federal construction project with contractor. Context: During the testing of expenditures for the ESSER projects we noted construction projects with labor in excess of $2,000. Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141--3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Effect: The District was not in compliance with the prevailing wage rate requirement and the internal control system of the District did not identify the need for the compliance. Cause: Internal control procedures were not in place to ensure a contract was draw up to include the prevailing wage rate clause and to ensure the weekly certified payrolls were submitted to the District. Recommendation: The District should implement internal control procedures for any construction contracts in excess of $2,000 funded with federal monies include a contract with the prevailing wage rate clause and submission of weekly certified payrolls.
2022-01 Prevailing Wage Rate Internal Control and Compliance CFDA Number: 84.425D Federal Award Number: 036-0648-92-2021 Federal Agency: U.S. Department of Education Pass-through Entity: Montana Office of Public Instruction Condition: The District did not require a contract indicating the requirement of prevailing wage rate and weekly certified payrolls submitted for federal construction project with contractor. Context: During the testing of expenditures for the ESSER projects we noted construction projects with labor in excess of $2,000. Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141--3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Effect: The District was not in compliance with the prevailing wage rate requirement and the internal control system of the District did not identify the need for the compliance. Cause: Internal control procedures were not in place to ensure a contract was draw up to include the prevailing wage rate clause and to ensure the weekly certified payrolls were submitted to the District. Recommendation: The District should implement internal control procedures for any construction contracts in excess of $2,000 funded with federal monies include a contract with the prevailing wage rate clause and submission of weekly certified payrolls.
2022-002 Airport Improvement Program ? 20.106 Significant Deficiency: Condition: The Airport did not obtain copies of certified payroll reports from the contractor on a construction project occurring during the period. Context and Criteria: Nonfederal entities engaging in construction contracts in excess of $2,000 are required to receive weekly payroll records and a statement of compliance (certified payrolls) from the construction contractor(s) as required by 2 CFR Part 176, Subpart C (2 CFR section 200.326) for compliance with uniform guidance. Cause: Program employees were not provided weekly certified payrolls by the construction contractor. Effect: The Airport was not in compliance with 2 CFR section 200 for the administration of federal awards. Recommendation: Procedures should be put in place to ensure weekly certified payrolls are received from construction contractors.
Finding: 2022-004 Special Provisions ? Wage Rate Requirements Federal agency: U.S. Department of Education Federal program name: Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D and 84.425U Pass-Through Agency: Minnesota Department of Education Pass-Through Number(s): S425D210045 Award Period: July 1, 2021 ? June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: Per 29 CFR Part 5, 2 CFR Part 176, subpart C, and 2 CFR section 200.326, the District is required to include in their construction contract subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the Department of Labor regulations. This includes a requirement for the contractor or subcontractor to submit to the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance. Condition: During special provisions testing, it was noted that the District has the correct wording relating to the Wage Rate Requirements in the contracts but does not obtain any documentation from the contractor. Questioned Costs: Not applicable. Context: During our testing of special provisions, it was noted that 2 of 2 contractors selected had the proper wording relating to the Wage Rate Requirements in the contract but the District did not receive any documentation verifying the compliance. Cause: Oversight. Effect: Lack of proper documentation of controls over compliance with special provision requirements could result in paying contractors that are not in compliance with the Wage Rate Requirements set by the Department of Labor. This could ultimately result in questioned costs. Repeat Finding: Not applicable. Recommendation: We recommend that the District obtain the weekly payrolls and statement of compliance from contractors that work on construction contracts financed by federal assistance funds. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding: 2022-004 Special Provisions ? Wage Rate Requirements Federal agency: U.S. Department of Education Federal program name: Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D and 84.425U Pass-Through Agency: Minnesota Department of Education Pass-Through Number(s): S425D210045 Award Period: July 1, 2021 ? June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: Per 29 CFR Part 5, 2 CFR Part 176, subpart C, and 2 CFR section 200.326, the District is required to include in their construction contract subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the Department of Labor regulations. This includes a requirement for the contractor or subcontractor to submit to the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance. Condition: During special provisions testing, it was noted that the District has the correct wording relating to the Wage Rate Requirements in the contracts but does not obtain any documentation from the contractor. Questioned Costs: Not applicable. Context: During our testing of special provisions, it was noted that 2 of 2 contractors selected had the proper wording relating to the Wage Rate Requirements in the contract but the District did not receive any documentation verifying the compliance. Cause: Oversight. Effect: Lack of proper documentation of controls over compliance with special provision requirements could result in paying contractors that are not in compliance with the Wage Rate Requirements set by the Department of Labor. This could ultimately result in questioned costs. Repeat Finding: Not applicable. Recommendation: We recommend that the District obtain the weekly payrolls and statement of compliance from contractors that work on construction contracts financed by federal assistance funds. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding: 2022-004 Special Provisions ? Wage Rate Requirements Federal agency: U.S. Department of Education Federal program name: Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D and 84.425U Pass-Through Agency: Minnesota Department of Education Pass-Through Number(s): S425D210045 Award Period: July 1, 2021 ? June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: Per 29 CFR Part 5, 2 CFR Part 176, subpart C, and 2 CFR section 200.326, the District is required to include in their construction contract subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the Department of Labor regulations. This includes a requirement for the contractor or subcontractor to submit to the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance. Condition: During special provisions testing, it was noted that the District has the correct wording relating to the Wage Rate Requirements in the contracts but does not obtain any documentation from the contractor. Questioned Costs: Not applicable. Context: During our testing of special provisions, it was noted that 2 of 2 contractors selected had the proper wording relating to the Wage Rate Requirements in the contract but the District did not receive any documentation verifying the compliance. Cause: Oversight. Effect: Lack of proper documentation of controls over compliance with special provision requirements could result in paying contractors that are not in compliance with the Wage Rate Requirements set by the Department of Labor. This could ultimately result in questioned costs. Repeat Finding: Not applicable. Recommendation: We recommend that the District obtain the weekly payrolls and statement of compliance from contractors that work on construction contracts financed by federal assistance funds. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding: 2022-004 Special Provisions ? Wage Rate Requirements Federal agency: U.S. Department of Education Federal program name: Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D and 84.425U Pass-Through Agency: Minnesota Department of Education Pass-Through Number(s): S425D210045 Award Period: July 1, 2021 ? June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: Per 29 CFR Part 5, 2 CFR Part 176, subpart C, and 2 CFR section 200.326, the District is required to include in their construction contract subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the Department of Labor regulations. This includes a requirement for the contractor or subcontractor to submit to the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance. Condition: During special provisions testing, it was noted that the District has the correct wording relating to the Wage Rate Requirements in the contracts but does not obtain any documentation from the contractor. Questioned Costs: Not applicable. Context: During our testing of special provisions, it was noted that 2 of 2 contractors selected had the proper wording relating to the Wage Rate Requirements in the contract but the District did not receive any documentation verifying the compliance. Cause: Oversight. Effect: Lack of proper documentation of controls over compliance with special provision requirements could result in paying contractors that are not in compliance with the Wage Rate Requirements set by the Department of Labor. This could ultimately result in questioned costs. Repeat Finding: Not applicable. Recommendation: We recommend that the District obtain the weekly payrolls and statement of compliance from contractors that work on construction contracts financed by federal assistance funds. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding: 2022-004 Special Provisions ? Wage Rate Requirements Federal agency: U.S. Department of Education Federal program name: Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D and 84.425U Pass-Through Agency: Minnesota Department of Education Pass-Through Number(s): S425D210045 Award Period: July 1, 2021 ? June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: Per 29 CFR Part 5, 2 CFR Part 176, subpart C, and 2 CFR section 200.326, the District is required to include in their construction contract subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the Department of Labor regulations. This includes a requirement for the contractor or subcontractor to submit to the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance. Condition: During special provisions testing, it was noted that the District has the correct wording relating to the Wage Rate Requirements in the contracts but does not obtain any documentation from the contractor. Questioned Costs: Not applicable. Context: During our testing of special provisions, it was noted that 2 of 2 contractors selected had the proper wording relating to the Wage Rate Requirements in the contract but the District did not receive any documentation verifying the compliance. Cause: Oversight. Effect: Lack of proper documentation of controls over compliance with special provision requirements could result in paying contractors that are not in compliance with the Wage Rate Requirements set by the Department of Labor. This could ultimately result in questioned costs. Repeat Finding: Not applicable. Recommendation: We recommend that the District obtain the weekly payrolls and statement of compliance from contractors that work on construction contracts financed by federal assistance funds. Views of Responsible Officials: There is no disagreement with the audit finding.
REFERENCE: 2022-101 CFDA NUMBER 84.425d ? COVID 19 ? EDUCATION STABILIZATION FUND U.S. DEPARTMENT OF EDUCATION ? 2022 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER: S425D210038 QUESTIONED COSTS N/A CONDITION Weekly certified payroll reports were not obtained from the construction contractor to be reviewed for compliance with Davis-Bacon prevailing wage rate requirements from the start of construction in June 2022 through July 2022. The certified payroll reports were obtained on July 29, 2022 and reviewed by the School?s staff. CRITERIA In accordance with 29 CFR Subtitle A, Part 5, Subpart A Davis-Bacon and Related Acts Provisions and Procedures, ? 5.5(a)(3)(ii)(A), the contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. Instead the payrolls shall only need to include an individually identifying number for each employee (e.g., the last four digits of the employee's social security number). The required weekly payroll information may be submitted in any form desired. In accordance with 29 CFR Subtitle A, Part 5, Subpart A Davis-Bacon and Related Acts Provisions and Procedures, ? 5.5(a)(3)(ii)(B), Each payroll submitted shall be accompanied by a ?Statement of Compliance,? signed by the contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the contract and shall certify the following: (1) That the payroll for the payroll period contains the information required to be provided under ? 5.5 (a)(3)(ii) of Regulations, 29 CFR part 5, the appropriate information is being maintained under ? 5.5 (a)(3)(i) of Regulations, 29 CFR part 5, and that such information is correct and complete; (2) That each laborer or mechanic (including each helper, apprentice, and trainee) employed on the contract during the payroll period has been paid the full weekly wages earned, without rebate, either directly or indirectly, and that no deductions have been made either directly or indirectly from the full wages earned, other than permissible deductions as set forth in Regulations, 29 CFR part 3; (3) That each laborer or mechanic has been paid not less than the applicable wage rates and fringe benefits or cash equivalents for the classification of work performed, as specified in the applicable wage determination incorporated into the contract. In accordance with OMB Compliance Supplement, Part 4 ? Wage Requirements Cross-Cutting Section, Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In accordance with OMB Compliance Supplement, Part 6 ? Internal Control, non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. EFFECT Program requirements were not complied with. The School may not complied with prevailing wage requirements. CAUSE Internal controls were not designed appropriately to ensure that documentation was obtained weekly for certified payroll reports to ensure compliance with prevailing wage requirements. RECOMMENDATION AND BENEFIT A process should be developed to obtain and review weekly certified payroll reports for construction services subject to Davis-Bacon. Documentation supporting prevailing wage requirements should be retained. This will help ensure that program and prevailing wage requirements are complied with. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Finding 2022-004 Federal agency: U.S. Department of Education Federal program name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A220087, H173A190086, 2022 Pass-Through Agency: Minnesota Department of Education Pass-Through Number: H027A190087, H173A180086 Award Period: Fiscal year 2022 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: During our testing of the District?s procurements within the Special Education program, it was noted that not all procurements followed the appropriate method and history of the transaction was not sufficiently documented. Questioned Costs: ALN 84.027 - $173,812.24. Context: Out of seven procurement which were tested, we noted five of them for which the District did not retain documentation detailing the history of the procurement, including the rationale for choosing the particular vendor. Cause: The District during the pandemic and shortly thereafter, was not able to properly ensure all contracts has procurement documentation retained and performed as required by the Uniform Guidance. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes, this is a repeat finding. It was presented as Finding 2021-012 in the previous report for fiscal year 2021. Recommendation: We recommend the District 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.
Finding 2022-004 Federal agency: U.S. Department of Education Federal program name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A220087, H173A190086, 2022 Pass-Through Agency: Minnesota Department of Education Pass-Through Number: H027A190087, H173A180086 Award Period: Fiscal year 2022 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: During our testing of the District?s procurements within the Special Education program, it was noted that not all procurements followed the appropriate method and history of the transaction was not sufficiently documented. Questioned Costs: ALN 84.027 - $173,812.24. Context: Out of seven procurement which were tested, we noted five of them for which the District did not retain documentation detailing the history of the procurement, including the rationale for choosing the particular vendor. Cause: The District during the pandemic and shortly thereafter, was not able to properly ensure all contracts has procurement documentation retained and performed as required by the Uniform Guidance. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes, this is a repeat finding. It was presented as Finding 2021-012 in the previous report for fiscal year 2021. Recommendation: We recommend the District 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.
Finding 2022-004 Federal agency: U.S. Department of Education Federal program name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A220087, H173A190086, 2022 Pass-Through Agency: Minnesota Department of Education Pass-Through Number: H027A190087, H173A180086 Award Period: Fiscal year 2022 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: During our testing of the District?s procurements within the Special Education program, it was noted that not all procurements followed the appropriate method and history of the transaction was not sufficiently documented. Questioned Costs: ALN 84.027 - $173,812.24. Context: Out of seven procurement which were tested, we noted five of them for which the District did not retain documentation detailing the history of the procurement, including the rationale for choosing the particular vendor. Cause: The District during the pandemic and shortly thereafter, was not able to properly ensure all contracts has procurement documentation retained and performed as required by the Uniform Guidance. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes, this is a repeat finding. It was presented as Finding 2021-012 in the previous report for fiscal year 2021. Recommendation: We recommend the District 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.
2022-07 Non-compliance with Wage Rate Requirements CFDA Title: Impact Aid CFDA Number: 84.041 Federal Award Number: 2022 Federal Agency: U.S. Department of Education Pass-through Entity: Direct Condition: The District did not require certified weekly payrolls for claims paid related to fixing a water line and electrical upgrades paid with Impact Aid funding. Context: During testing of the Impact Aid expenditures, we noted two vendors related to construction/remodeling. Criteria: Compliance Requirements ? Section 7007 construction funds, as well as any Section 7002 or 7003(b) funds spent for construction or minor remodeling, are subject to Wage Rate Requirements (20 USC 1232b). Compliance Requirement ? All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141-3144, 3146, and 3147). Non-federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR part 215, Appendix A, Contract Provisions); 2 CFR part 176, subpart C; and 2 CFR section 200.326). Effect: The District was not in compliance with the Wage Rate Requirement. Cause: The vendors did not submit the weekly certified payroll reports and the District?s internal control system did not detect the error. Recommendation: The District should require all Impact Aid fund expenditures for construction or minor remodeling to be subject to the Wage Rate Requirements.
Federal Agency: United States Department of Treasury Federal Program Name: COVID 19 - Coronavirus State and local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: State of Connecticut Office of Policy and Management Pass-Through Number(s): 12060-OPM20600-29669 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The Town should have internal controls designed to ensure compliance with those provisions. Condition: The Town?s procurement standards do not include the required elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None Context: Although the Town did not have a policy in place in conformity with the Federal Uniform Guidance criteria, the Town did follow its own procedures as it relates to the contracts under the procurements applicable to the Town?s major programs. Cause: The Town did not formally update their procurement policy as any federal grants they receive in which procurement is required, the appropriate language is included in the grant requirements and documents. Effect: The auditor noted no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-002. Recommendation: We recommend that the Town review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: Management agrees with this finding.
Federal Agency: United States Department of Treasury Federal Program Name: COVID 19 - Coronavirus State and local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: State of Connecticut Office of Policy and Management Pass-Through Number(s): 12060-OPM20600-29669 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The Town should have internal controls designed to ensure compliance with those provisions. Condition: The Town?s procurement standards do not include the required elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None Context: Although the Town did not have a policy in place in conformity with the Federal Uniform Guidance criteria, the Town did follow its own procedures as it relates to the contracts under the procurements applicable to the Town?s major programs. Cause: The Town did not formally update their procurement policy as any federal grants they receive in which procurement is required, the appropriate language is included in the grant requirements and documents. Effect: The auditor noted no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-002. Recommendation: We recommend that the Town review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: Management agrees with this finding.
Program Information: AL #: 93.243 U.S. Department of Health and Human Services SAMHSA Youth Programs ? Youth Tree, Youth Suicide Prevention, Youth Connections Project Award Numbers: 6H79TI081193-01, 1H79SM082124-01, 1H79SM081540-01 Award Periods: 9/30/18-9/29/23, 6/30/19-6/29/24, 9/30/18-9/29/23 AL #: 93.441 U.S. Department of Health and Human Services Passed through California Rural Indian Health Board, Inc. Indian Health Services ? CRIHB 22, Indian Health Services ? CRIHB 21, COVID-19 Indian Health Services ? CRIHB 21 Award Numbers: 235-18-0004 Award Periods: 4/1/18-3/31/24 Criteria: Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200. Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the suspension & debarment standards set out at 2 CFR Part 180, which implements Executive Orders 12549 and 12689, ?Debarment and Suspension?, federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition/Context: During transactional testing, the following was noted: ? 93.441 ? 4 out of 5 vendors reviewed did not have evidence of multiple competitive bids being obtained. ? 93.243 ? 2 out of 2 vendors reviewed did not have evidence of multiple competitive bids being obtained. Additionally, there are no processes in place to check to ensure vendors are not suspended or debarred prior to conducting business. ? 93.441 - 4 out of 5 vendors reviewed did not have evidence or processes in place to check to ensure vendors were not suspended or debarred prior to conducting business. ? 93.243 - 2 out of 2 vendors reviewed did not have evidence or processes in place to check to ensure vendors were not suspended or debarred prior to conducting business. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: The Clinic was unaware of the requirement to check vendors for suspension and debarment prior to conducting business with vendors, and there were ineffective controls in place during the period over procurement, along with lack of management oversight. Effect: The Clinic is not enacting fair competition in the procurement process nor are they following their policies by making sure bidding support is provided before the appropriate officials sign the Purchase Order. Additionally, the Clinic may be paying vendors that are suspended and debarred which would be an unallowable cost. Questioned Costs: AL#: 93.441 Known: Procurement- $42,903 AL#: 93.243 Known: Procurement- $15,380 Repeat Finding: Yes, 2021-003. Recommendation: We recommend the Clinic conduct training for staff and program managers to review the Clinic?s procurement, and suspension and debarment policies and procedures along with federal regulations. Views 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: AL #: 93.243 U.S. Department of Health and Human Services SAMHSA Youth Programs ? Youth Tree, Youth Suicide Prevention, Youth Connections Project Award Numbers: 6H79TI081193-01, 1H79SM082124-01, 1H79SM081540-01 Award Periods: 9/30/18-9/29/23, 6/30/19-6/29/24, 9/30/18-9/29/23 AL #: 93.441 U.S. Department of Health and Human Services Passed through California Rural Indian Health Board, Inc. Indian Health Services ? CRIHB 22, Indian Health Services ? CRIHB 21, COVID-19 Indian Health Services ? CRIHB 21 Award Numbers: 235-18-0004 Award Periods: 4/1/18-3/31/24 Criteria: Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200. Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the suspension & debarment standards set out at 2 CFR Part 180, which implements Executive Orders 12549 and 12689, ?Debarment and Suspension?, federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition/Context: During transactional testing, the following was noted: ? 93.441 ? 4 out of 5 vendors reviewed did not have evidence of multiple competitive bids being obtained. ? 93.243 ? 2 out of 2 vendors reviewed did not have evidence of multiple competitive bids being obtained. Additionally, there are no processes in place to check to ensure vendors are not suspended or debarred prior to conducting business. ? 93.441 - 4 out of 5 vendors reviewed did not have evidence or processes in place to check to ensure vendors were not suspended or debarred prior to conducting business. ? 93.243 - 2 out of 2 vendors reviewed did not have evidence or processes in place to check to ensure vendors were not suspended or debarred prior to conducting business. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: The Clinic was unaware of the requirement to check vendors for suspension and debarment prior to conducting business with vendors, and there were ineffective controls in place during the period over procurement, along with lack of management oversight. Effect: The Clinic is not enacting fair competition in the procurement process nor are they following their policies by making sure bidding support is provided before the appropriate officials sign the Purchase Order. Additionally, the Clinic may be paying vendors that are suspended and debarred which would be an unallowable cost. Questioned Costs: AL#: 93.441 Known: Procurement- $42,903 AL#: 93.243 Known: Procurement- $15,380 Repeat Finding: Yes, 2021-003. Recommendation: We recommend the Clinic conduct training for staff and program managers to review the Clinic?s procurement, and suspension and debarment policies and procedures along with federal regulations. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.