Criteria: Non-federal entities, 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 applicablestate and local laws and regulations, provided the policies and procedures conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200.Condition/context: A sample of 2 expenditures greater than the micropurchase threshold of $10,000 but less than the simplified acquisition threshold of $250,000 were selected from the three transactions that exceeded the micropurchase threshold of $10,000. For one of the expenditures the University did not obtain the required rate quotations; per the University?s documented policy two quotes should have been obtained. In addition, we noted the University does not have a documented standard of conduct that covers conflicts of interest and governs the performance of its employees engaged in the selection, award, and administration of contracts.Our sample was not, and was not intended to be, statistically valid.Questioned costs: None.Cause/Effect: The personnel completing purchases on behalf of the University were unaware of the internal procurement policies that are in conformance with federal statutes and 2 CFR Part 200. The lack of obtaining the required rate quotations increases the risk that the price paid was not competitive when compared to the market and that the transaction may not have been in a manner providing full and opencompetition. The lack of a documented standard of conduct that covers conflict of interest increases the risk that an actual or perceived conflict could occur.Repeat finding: NoRecommendation: We recommend the University implement controls to ensure all employees making federal purchases on behalf of the University are aware of the University?s documented procurement policy that is in accordance with 2 CFR Part 200. In addition, we recommend the University document its standard of conduct that covers conflicts of interest and governs the performance of its employees engaged in the selection, award, and administration of contracts.Views of responsible officials and planned corrective actions: Heritage University agrees to put procedures in place to make certain that every employee making federal purchases on the University's behalf is aware of the University's written procurement policy, which complies with 2 CFR Part 200. Additionally, the University is to formalize its code of conduct, which addresses conflicts of interest and establishes expectations for staff members involved in contract administration, selection, and award.
Criteria: Non-federal entities, 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 applicablestate and local laws and regulations, provided the policies and procedures conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200.Condition/context: A sample of 2 expenditures greater than the micropurchase threshold of $10,000 but less than the simplified acquisition threshold of $250,000 were selected from the three transactions that exceeded the micropurchase threshold of $10,000. For one of the expenditures the University did not obtain the required rate quotations; per the University?s documented policy two quotes should have been obtained. In addition, we noted the University does not have a documented standard of conduct that covers conflicts of interest and governs the performance of its employees engaged in the selection, award, and administration of contracts.Our sample was not, and was not intended to be, statistically valid.Questioned costs: None.Cause/Effect: The personnel completing purchases on behalf of the University were unaware of the internal procurement policies that are in conformance with federal statutes and 2 CFR Part 200. The lack of obtaining the required rate quotations increases the risk that the price paid was not competitive when compared to the market and that the transaction may not have been in a manner providing full and opencompetition. The lack of a documented standard of conduct that covers conflict of interest increases the risk that an actual or perceived conflict could occur.Repeat finding: NoRecommendation: We recommend the University implement controls to ensure all employees making federal purchases on behalf of the University are aware of the University?s documented procurement policy that is in accordance with 2 CFR Part 200. In addition, we recommend the University document its standard of conduct that covers conflicts of interest and governs the performance of its employees engaged in the selection, award, and administration of contracts.Views of responsible officials and planned corrective actions: Heritage University agrees to put procedures in place to make certain that every employee making federal purchases on the University's behalf is aware of the University's written procurement policy, which complies with 2 CFR Part 200. Additionally, the University is to formalize its code of conduct, which addresses conflicts of interest and establishes expectations for staff members involved in contract administration, selection, and award.
Criteria: Non-federal entities, 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 applicablestate and local laws and regulations, provided the policies and procedures conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200.Condition/context: A sample of 2 expenditures greater than the micropurchase threshold of $10,000 but less than the simplified acquisition threshold of $250,000 were selected from the three transactions that exceeded the micropurchase threshold of $10,000. For one of the expenditures the University did not obtain the required rate quotations; per the University?s documented policy two quotes should have been obtained. In addition, we noted the University does not have a documented standard of conduct that covers conflicts of interest and governs the performance of its employees engaged in the selection, award, and administration of contracts.Our sample was not, and was not intended to be, statistically valid.Questioned costs: None.Cause/Effect: The personnel completing purchases on behalf of the University were unaware of the internal procurement policies that are in conformance with federal statutes and 2 CFR Part 200. The lack of obtaining the required rate quotations increases the risk that the price paid was not competitive when compared to the market and that the transaction may not have been in a manner providing full and opencompetition. The lack of a documented standard of conduct that covers conflict of interest increases the risk that an actual or perceived conflict could occur.Repeat finding: NoRecommendation: We recommend the University implement controls to ensure all employees making federal purchases on behalf of the University are aware of the University?s documented procurement policy that is in accordance with 2 CFR Part 200. In addition, we recommend the University document its standard of conduct that covers conflicts of interest and governs the performance of its employees engaged in the selection, award, and administration of contracts.Views of responsible officials and planned corrective actions: Heritage University agrees to put procedures in place to make certain that every employee making federal purchases on the University's behalf is aware of the University's written procurement policy, which complies with 2 CFR Part 200. Additionally, the University is to formalize its code of conduct, which addresses conflicts of interest and establishes expectations for staff members involved in contract administration, selection, and award.
Criteria or specific requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200.Condition: The College had a procurement policy that conformed to 2 CFR Part 200. Yet, during our testing, we noted that the College?s procurement policies were not followed. There was a single vendor who provided similar goods and services across two grants which had cumulative purchases over $10,000 within the fiscal year. This triggered Small Purchase compliance requirements to be followed; however, there was no documentation to support compliance.Questioned costs: None.Context: We tested a sample of five vendors and noted one vendor had the exception noted above.Cause: The College focused on the individual amounts being charged to the separate grants, not the cumulative amount paid to the vendor for the goods and services being provided.Effect: The College is not in compliance with their policy, nor are they in compliance with the prescribed methods of procurement as outlined in 2 CFR Part 200.320 to ensure reasonable price or rate.Repeat finding: No.Recommendation: We recommend that the College ensure its policies and procedures over procurement are being enforced to ensure reasonable prices and rates. Specifically, the College should consider training employees that regulations do apply when a single vendor is being used for a good or service, yet the charges are split amongst various funding sources.View of responsible official: The College agrees with the finding.
Finding 2022-003: Equipment (50000)Assistance Listing No. 84.425 ? Education Stabilization Fund,Elementary and Secondary School Emergency Relief (ESSER) FundU.S. Department of EducationPassed through California Department of EducationCriteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity.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: The District made three expenditures above the capital threshold for federal purchases but did not obtain prior approval from the California Department of Education. Furthermore, the District was unable to provide documentation that federal wage rate requirements were included in the contracts.Question Costs: $66,608Context: These were the only capital purchases made from this federal program in the year under audit.Cause: The District was unaware of the requirements to obtain prior approval from CDE and to obtain federal wage rate data.Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency.Recommendation: We recommend that the District obtain prior approval from CDE and that contracts include federal wage rate requirements for all capital purchases from the Education Stabilization Fund.Views of Responsible Officials: The District will ensure it receives prior approval from CDE prior to making expenditures utilizing ESSER funds and will update its agreements to reflect the federal wage rate requirements when utilizing this funding.
2021/2 022 Wage Rate Compliace 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 comply with the wage rate compliance related to the teacher housing civil construction project expenditures paid from Impact Aid monies. Criteria: 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). Context: During the testing of significant claims for the Impact Aid major program related to construction, we noted claims in which the wage rate requirements would apply. Effect: Noncompliance with the Wage Rate Requirement. Cause: The District was not aware of the requirement. Recommendation: The District should implement internal controls to determine the federal compliance requirements of all federal funds received. In addition, procedures should be implemented to ensure any federal funds received in which the Wage Rate Requirement is required the following are implemented: 1. any construction vendor is by contract which includes the Prevailing Wage clauses for the contractors and subcontractors 2. the weekly certified payrolls are submitted
Finding 2022-002 – Special Education Cluster – AL No.’s 84.027 & 84.173 Department of Education Massachusetts Department of Elementary and Secondary Education Massachusetts Department of Early Education and Care Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Programs Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. As governmental subrecipients of states are also required to use the same state procurement policies and procedures for federal funds as for non‐federal funds, the Town is required to follow Massachusetts General Laws, Chapter (MGL) 30(b). MGL 30(b) requires the solicitation of three written or oral quotes for procurements of supplies between $10,000 and $49,999 and sealed bids or proposals for procurements of supplies $50,000 and over. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context: During fiscal year 2022, the Town did not comply with the required procurement policies and procedures process for procurements that exceeded both State and Federal thresholds. Questioned Costs: Unkown Cause: Weaknesses in the design and operation of controls. Effect or Potential Effect: Due to the weaknesses in internal controls noted above, there is a risk that amounts charged to federal awards may not be in accordance with procurement, suspension, and debarment principles. No known questioned costs are reported, as it is not quantifiable. Identification as a Repeat Finding: Yes, finding number 2021-002 Recommendation: The Town should address the weaknesses in internal controls noted above in order to ensure that procurements are conducted in accordance with federal and state requirements. Managements Response: The Town and Schools have Acushnet’s Federal Grant Procedures Manual (February 2023) to ensure that procurements are conducted in accordance with Federal and State requirements – in particular, the procurement standards set out at 2 CFR sections 200.318 through 200.326
Finding 2022-002 – Special Education Cluster – AL No.’s 84.027 & 84.173 Department of Education Massachusetts Department of Elementary and Secondary Education Massachusetts Department of Early Education and Care Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Programs Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. As governmental subrecipients of states are also required to use the same state procurement policies and procedures for federal funds as for non‐federal funds, the Town is required to follow Massachusetts General Laws, Chapter (MGL) 30(b). MGL 30(b) requires the solicitation of three written or oral quotes for procurements of supplies between $10,000 and $49,999 and sealed bids or proposals for procurements of supplies $50,000 and over. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context: During fiscal year 2022, the Town did not comply with the required procurement policies and procedures process for procurements that exceeded both State and Federal thresholds. Questioned Costs: Unkown Cause: Weaknesses in the design and operation of controls. Effect or Potential Effect: Due to the weaknesses in internal controls noted above, there is a risk that amounts charged to federal awards may not be in accordance with procurement, suspension, and debarment principles. No known questioned costs are reported, as it is not quantifiable. Identification as a Repeat Finding: Yes, finding number 2021-002 Recommendation: The Town should address the weaknesses in internal controls noted above in order to ensure that procurements are conducted in accordance with federal and state requirements. Managements Response: The Town and Schools have Acushnet’s Federal Grant Procedures Manual (February 2023) to ensure that procurements are conducted in accordance with Federal and State requirements – in particular, the procurement standards set out at 2 CFR sections 200.318 through 200.326
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agency: Department of Interior and Department of Education Passed through the Bureau of Indian Education (BIE) Title: Indian School Equalization Program (ISEP) Education Stabilization Fund (ESF) CFDA number: 15.042 and 84.425 Award number: All major program award numbers Award period: All major program periods Criteria: The Uniform Guidance 2 CFR 200.318-200.326 require verification of suspension and debarment as part of the procurement process. Condition: The School was unable to provide any evidence of verification of suspension and debarment on one of the vendors. Questioned Costs: N/A Cause: The School did not retain evidence of verification of suspension and debarment. Effect: The School was unable to provide evidence of verification of suspension and debarment. Auditor’s Recommendations: Evidence of verification of suspension and debarment to be kept. Management’s Response: Although the PILC verifies the suspension and debarment status of every vendor for potential purchases above $150,000, we had not been routinely printing documentation verifying this process. In the future, the School will be printing off evidence of a dated keyword search to demonstrate that a vendor is not listed on the www.SAM.gov suspension/debarment list for procurement purposes.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agency: Department of Interior and Department of Education Passed through the Bureau of Indian Education (BIE) Title: Indian School Equalization Program (ISEP) Education Stabilization Fund (ESF) CFDA number: 15.042 and 84.425 Award number: All major program award numbers Award period: All major program periods Criteria: The Uniform Guidance 2 CFR 200.318-200.326 require verification of suspension and debarment as part of the procurement process. Condition: The School was unable to provide any evidence of verification of suspension and debarment on one of the vendors. Questioned Costs: N/A Cause: The School did not retain evidence of verification of suspension and debarment. Effect: The School was unable to provide evidence of verification of suspension and debarment. Auditor’s Recommendations: Evidence of verification of suspension and debarment to be kept. Management’s Response: Although the PILC verifies the suspension and debarment status of every vendor for potential purchases above $150,000, we had not been routinely printing documentation verifying this process. In the future, the School will be printing off evidence of a dated keyword search to demonstrate that a vendor is not listed on the www.SAM.gov suspension/debarment list for procurement purposes.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agency: Department of Interior and Department of Education Passed through the Bureau of Indian Education (BIE) Title: Indian School Equalization Program (ISEP) Education Stabilization Fund (ESF) CFDA number: 15.042 and 84.425 Award number: All major program award numbers Award period: All major program periods Criteria: The Uniform Guidance 2 CFR 200.318-200.326 require verification of suspension and debarment as part of the procurement process. Condition: The School was unable to provide any evidence of verification of suspension and debarment on one of the vendors. Questioned Costs: N/A Cause: The School did not retain evidence of verification of suspension and debarment. Effect: The School was unable to provide evidence of verification of suspension and debarment. Auditor’s Recommendations: Evidence of verification of suspension and debarment to be kept. Management’s Response: Although the PILC verifies the suspension and debarment status of every vendor for potential purchases above $150,000, we had not been routinely printing documentation verifying this process. In the future, the School will be printing off evidence of a dated keyword search to demonstrate that a vendor is not listed on the www.SAM.gov suspension/debarment list for procurement purposes.
2022-004 – Procurement, Suspension, and Debarment Federal Program Information Funding Agency: US Department of Education Title: Special Education Cluster AL Number: 84.027; 84.173 Criteria Non-federal entities other than states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Furthermore, Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction that are expected to equal or exceed $25,000. Condition Upper Valley Special Education District does not have a written procurement policy in place that follows Uniform Guidance. In addition, the District is not reviewing applicable vendors for suspension and debarment. Questioned Costs None. Context During inquiry and testing we noted that UVSE did not have a procurement policy in place that follows Uniform Guidance and that they do not ensure vendors are not suspended or debarred from receiving federal funds. Effect Upper Valley Special Education District is not in compliance with Uniform Guidance procurement, suspension, and procurement requirements. Also, the District has an increased risk of entering into a covered transaction with a vendor who is suspended or debarred from receiving federal funds. Cause Management oversight. Recommendation The District’s should create and implement a procurement policy that follows federal requirements. The District should also create policies and procedures to ensure they do not enter into a covered transaction with a vendor who is suspended or debarred from receiving federal funds. Repeat Finding This is not a repeat finding. Views of Responsible Officials See corrective action plan.
2022-004 – Procurement, Suspension, and Debarment Federal Program Information Funding Agency: US Department of Education Title: Special Education Cluster AL Number: 84.027; 84.173 Criteria Non-federal entities other than states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Furthermore, Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction that are expected to equal or exceed $25,000. Condition Upper Valley Special Education District does not have a written procurement policy in place that follows Uniform Guidance. In addition, the District is not reviewing applicable vendors for suspension and debarment. Questioned Costs None. Context During inquiry and testing we noted that UVSE did not have a procurement policy in place that follows Uniform Guidance and that they do not ensure vendors are not suspended or debarred from receiving federal funds. Effect Upper Valley Special Education District is not in compliance with Uniform Guidance procurement, suspension, and procurement requirements. Also, the District has an increased risk of entering into a covered transaction with a vendor who is suspended or debarred from receiving federal funds. Cause Management oversight. Recommendation The District’s should create and implement a procurement policy that follows federal requirements. The District should also create policies and procedures to ensure they do not enter into a covered transaction with a vendor who is suspended or debarred from receiving federal funds. Repeat Finding This is not a repeat finding. Views of Responsible Officials See corrective action plan.
Federal Agency: U.S. Department of Agriculture; U.S. Department of the Treasury Federal Program Name: Child Nutrition Cluster; Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 10.559; 21.027 Federal Award Identification Number and Year: 214RI306N1099/214RI306N1199 - 2022 Award Period: Fiscal Year 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement The Town and Coventry Public Schools must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (See the definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Condition The Towns purchasing policies within Coventry Public Schools do not include all elements as outlined in 2 CRF sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs None Context Although the Towns purchasing policies within Coventry Public Schools do not include all elements as outlined in 2 CRF sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 4 of 4 procurement transactions tested. Cause Management was not aware of the procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Effect The Town and Coventry Public Schools are at risk for noncompliance with Federal grants as it relates to procurement. Repeat Finding Yes Recommendation We recommend that the Town and Coventry Public Schools updates its procurement policy to include all elements identified in 2 CRF sections 200.303 and 200.318 through 200.326. Views of Responsible Officials Management agrees with this finding.
Federal Agency: U.S. Department of Agriculture; U.S. Department of the Treasury Federal Program Name: Child Nutrition Cluster; Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 10.559; 21.027 Federal Award Identification Number and Year: 214RI306N1099/214RI306N1199 - 2022 Award Period: Fiscal Year 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement The Town and Coventry Public Schools must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (See the definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Condition The Towns purchasing policies within Coventry Public Schools do not include all elements as outlined in 2 CRF sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs None Context Although the Towns purchasing policies within Coventry Public Schools do not include all elements as outlined in 2 CRF sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 4 of 4 procurement transactions tested. Cause Management was not aware of the procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Effect The Town and Coventry Public Schools are at risk for noncompliance with Federal grants as it relates to procurement. Repeat Finding Yes Recommendation We recommend that the Town and Coventry Public Schools updates its procurement policy to include all elements identified in 2 CRF sections 200.303 and 200.318 through 200.326. Views of Responsible Officials Management agrees with this finding.
Federal Program Name: Research and Development Cluster Federal Agency: National Science Foundation Federal Assistance Listing Title and Number: 47.074 Award Year: June 1, 2021 ? May 31, 2022 Criteria or Specific Requirement: Procurement, Suspension and Debarment Condition: The University?s procurement policy does not contain adequate documentation to demonstrate compliance with federal procurement regulations. (Deficiency) Questioned Costs: None. Context: The University?s documented procurement policies do not contain all the specified requirements of 2 CFR sections 200.318 through 200.326. Effect: The risks exist that the University could follow their procurement policy and procure an item with federal funds, which would not meet the federal procurement regulations. Cause: The writing of the policy did not take into account federal procurement regulations which are required to be incorporated for items procured with federal funds. Repeat Finding: No Recommendation: We recommend the University revise procurement policies to incorporate all required elements of federal procurement regulations.
General procurement standards outlined in 2 CFR 200.318(a) state that a non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to the applicable Federal law and the standards identified by the Uniform Guidance (sections 200.318 ? 200.326). The Uniform Guidance outlines requirements over the proper oversight of contractors, having written standards of conduct for employees involved in contracting, awarding contracts to responsible contractors, maintaining records documenting the history of procurements including cost price analysis, conducting all transactions in a manner which provides full and open competition, having procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded, utilizing the methods of procurement outlined in the Uniform Guidance, and ensuring every purchase order or contract includes the applicable provisions in Appendix II. Condition: The College?s policies and procedures over procurement generally conform to the requirements outlined by the Uniform Guidance with an exception bonding requirements, contracting with small and minority businesses, and items from Appendix II to Part 200. The auditors compared the College?s policies and procedures to the applicable sections of the Uniform Guidance by reviewing two vendors of a total of four vendors with expenditure for the ESF funds and obtained the associated supporting documentation for our selections. Additionally, the auditors noted that the Institution?s procedures were not followed with regard to ensuring full and open competition, obtaining bids/quotes for the items above the micro-purchase threshold, or retaining documentation for the requirement for verifying for vendor suspension or debarment prior to contracting. The College did check for suspension/disbarment following our identification of the finding and there were no issues. The sample was not a statistically valid sample. Cause: The College's policies were not compared to Uniform Guidance to ensure all elements were incorporated prior to entering into a contract with vendors for which federal funds were the source of the expenditure. Additionally, the College?s procedures were not followed appropriately with regard to vendor bids/selection or to check for suspension and debarment of the contractor to be utilized. Effect: The College is at risk of procuring goods and services that are not in compliance with the requirements outlined by the Uniform Guidance, which increases the risk of federal expenditures being used improperly or the College entering into a covered transaction with a vendor that is debarred or suspended. Questioned costs: Not applicable Context: Not applicable Recommendation: We recommend the College revise its policies and procedures to conform to the requirements of Uniform Guidance and ensure procedures and controls are followed for all vendors to verify that a vendor with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Relevant employees should be trained on these new policies and procedures.Management?s Response: Management did not appropriately follow federal procurement guidelines related to costs that were included in the institutional reimbursement portion of HEERF funding. This was an oversight and occurred as a result of the timing of when the purchases were made, or the contracts were entered into, and when the HEERF funding and applicable guidance was communicated by the Department of Education. Management did appropriately review all contracts and the related costs for reasonableness to ensure that the College was being prudent with its financial resources, whether from the federal government or not.
Finding 2022-002: Significant Deficiency: COVID-19 Education Stabilization Fund, Higher Education Emergency Relief Funds, Procurement, Suspension and Debarment Program: COVID-19 Education Stabilization Fund (ESF) Federal Agency: U.S. Department of Education Pass-Through Entity: Not Applicable Assistance Listing Number: 84.425F Federal Award Number: P425E200445 Federal Award Year: June 30, 2022 Criteria: General procurement standards outlined in 2 CFR 200.318(a) state that a non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to the applicable Federal law and the standards identified by the Uniform Guidance (sections 200.318 ? 200.326). The Uniform Guidance outlines requirements over the proper oversight of contractors, having written standards of conduct for employees involved in contracting, awarding contracts to responsible contractors, maintaining records documenting the history of procurements including cost price analysis, conducting all transactions in a manner which provides full and open competition, having procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded, utilizing the methods of procurement outlined in the Uniform Guidance, and ensuring every purchase order or contract includes the applicable provisions in Appendix II. Condition/Context: The College?s policies and procedures over procurement generally conform to the requirements outlined by the Uniform Guidance. The auditors compared the College?s policies and procedures to the applicable sections of the Uniform Guidance by reviewing two vendors of a total of eleven vendors with expenditure for the ESF funds and obtained the associated supporting documentation for our selections. For one of the vendors, it was determined that the College did not obtain multiple quotes before engaging in the contract. Additionally, the auditors noted that the Institution?s procedures were not followed with regard to ensuring full and open competition, obtaining bids/quotes for the items above the micro-purchase threshold, or retaining documentation for the requirement for verifying for vendor suspension or debarment prior to contracting. The sample was not a statistically valid sample. Cause: The College's policies were not compared to Uniform Guidance to ensure all elements were incorporated prior to entering into a contract with vendors for which federal funds were the source of the expenditure. Additionally, the College?s procedures were not followed appropriately with regard to vendor bids/selection or to check for suspension and debarment of the contractor to be utilized. Effect: The College is at risk of procuring goods and services that are not in compliance with the requirements outlined by the Uniform Guidance, which increases the risk of federal expenditures being used improperly or the College entering into a covered transaction with a vendor that is debarred or suspended. Questioned costs: Unknown Recommendation: We recommend the College revise its policies and procedures to conform to the requirements of Uniform Guidance and ensure procedures and controls are followed for all vendors to verify that a vendor with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Relevant employees should be trained on these new policies and procedures. Response: Vendor in question frequently supplied similar materials to MCAD due to known reliability and price competitiveness. Routine procurement procedures would not require verifying vendor for suspension or debarment. After noting this finding, a search was performed at SAM.gov and no exclusions were found for the cited vendors. Going forward, vendors used for this program will undergo verification before services or materials are contracted.
Federal Program Name: Research and Development Cluster Federal Agency: National Science Foundation Federal Assistance Listing Title and Number: 47.074 Award Year: June 1, 2021 ? May 31, 2022 Criteria or Specific Requirement: Procurement, Suspension and Debarment Condition: The University?s procurement policy does not contain adequate documentation to demonstrate compliance with federal procurement regulations. (Deficiency) Questioned Costs: None. Context: The University?s documented procurement policies do not contain all the specified requirements of 2 CFR sections 200.318 through 200.326. Effect: The risks exist that the University could follow their procurement policy and procure an item with federal funds, which would not meet the federal procurement regulations. Cause: The writing of the policy did not take into account federal procurement regulations which are required to be incorporated for items procured with federal funds. Repeat Finding: No Recommendation: We recommend the University revise procurement policies to incorporate all required elements of federal procurement regulations.
General procurement standards outlined in 2 CFR 200.318(a) state that a non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to the applicable Federal law and the standards identified by the Uniform Guidance (sections 200.318 ? 200.326). The Uniform Guidance outlines requirements over the proper oversight of contractors, having written standards of conduct for employees involved in contracting, awarding contracts to responsible contractors, maintaining records documenting the history of procurements including cost price analysis, conducting all transactions in a manner which provides full and open competition, having procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded, utilizing the methods of procurement outlined in the Uniform Guidance, and ensuring every purchase order or contract includes the applicable provisions in Appendix II. Condition: The College?s policies and procedures over procurement generally conform to the requirements outlined by the Uniform Guidance with an exception bonding requirements, contracting with small and minority businesses, and items from Appendix II to Part 200. The auditors compared the College?s policies and procedures to the applicable sections of the Uniform Guidance by reviewing two vendors of a total of four vendors with expenditure for the ESF funds and obtained the associated supporting documentation for our selections. Additionally, the auditors noted that the Institution?s procedures were not followed with regard to ensuring full and open competition, obtaining bids/quotes for the items above the micro-purchase threshold, or retaining documentation for the requirement for verifying for vendor suspension or debarment prior to contracting. The College did check for suspension/disbarment following our identification of the finding and there were no issues. The sample was not a statistically valid sample. Cause: The College's policies were not compared to Uniform Guidance to ensure all elements were incorporated prior to entering into a contract with vendors for which federal funds were the source of the expenditure. Additionally, the College?s procedures were not followed appropriately with regard to vendor bids/selection or to check for suspension and debarment of the contractor to be utilized. Effect: The College is at risk of procuring goods and services that are not in compliance with the requirements outlined by the Uniform Guidance, which increases the risk of federal expenditures being used improperly or the College entering into a covered transaction with a vendor that is debarred or suspended. Questioned costs: Not applicable Context: Not applicable Recommendation: We recommend the College revise its policies and procedures to conform to the requirements of Uniform Guidance and ensure procedures and controls are followed for all vendors to verify that a vendor with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Relevant employees should be trained on these new policies and procedures.Management?s Response: Management did not appropriately follow federal procurement guidelines related to costs that were included in the institutional reimbursement portion of HEERF funding. This was an oversight and occurred as a result of the timing of when the purchases were made, or the contracts were entered into, and when the HEERF funding and applicable guidance was communicated by the Department of Education. Management did appropriately review all contracts and the related costs for reasonableness to ensure that the College was being prudent with its financial resources, whether from the federal government or not.
Finding 2022-002: Significant Deficiency: COVID-19 Education Stabilization Fund, Higher Education Emergency Relief Funds, Procurement, Suspension and Debarment Program: COVID-19 Education Stabilization Fund (ESF) Federal Agency: U.S. Department of Education Pass-Through Entity: Not Applicable Assistance Listing Number: 84.425F Federal Award Number: P425E200445 Federal Award Year: June 30, 2022 Criteria: General procurement standards outlined in 2 CFR 200.318(a) state that a non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to the applicable Federal law and the standards identified by the Uniform Guidance (sections 200.318 ? 200.326). The Uniform Guidance outlines requirements over the proper oversight of contractors, having written standards of conduct for employees involved in contracting, awarding contracts to responsible contractors, maintaining records documenting the history of procurements including cost price analysis, conducting all transactions in a manner which provides full and open competition, having procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded, utilizing the methods of procurement outlined in the Uniform Guidance, and ensuring every purchase order or contract includes the applicable provisions in Appendix II. Condition/Context: The College?s policies and procedures over procurement generally conform to the requirements outlined by the Uniform Guidance. The auditors compared the College?s policies and procedures to the applicable sections of the Uniform Guidance by reviewing two vendors of a total of eleven vendors with expenditure for the ESF funds and obtained the associated supporting documentation for our selections. For one of the vendors, it was determined that the College did not obtain multiple quotes before engaging in the contract. Additionally, the auditors noted that the Institution?s procedures were not followed with regard to ensuring full and open competition, obtaining bids/quotes for the items above the micro-purchase threshold, or retaining documentation for the requirement for verifying for vendor suspension or debarment prior to contracting. The sample was not a statistically valid sample. Cause: The College's policies were not compared to Uniform Guidance to ensure all elements were incorporated prior to entering into a contract with vendors for which federal funds were the source of the expenditure. Additionally, the College?s procedures were not followed appropriately with regard to vendor bids/selection or to check for suspension and debarment of the contractor to be utilized. Effect: The College is at risk of procuring goods and services that are not in compliance with the requirements outlined by the Uniform Guidance, which increases the risk of federal expenditures being used improperly or the College entering into a covered transaction with a vendor that is debarred or suspended. Questioned costs: Unknown Recommendation: We recommend the College revise its policies and procedures to conform to the requirements of Uniform Guidance and ensure procedures and controls are followed for all vendors to verify that a vendor with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Relevant employees should be trained on these new policies and procedures. Response: Vendor in question frequently supplied similar materials to MCAD due to known reliability and price competitiveness. Routine procurement procedures would not require verifying vendor for suspension or debarment. After noting this finding, a search was performed at SAM.gov and no exclusions were found for the cited vendors. Going forward, vendors used for this program will undergo verification before services or materials are contracted.
U.S. Department of Health and Human Services 2022-002 Procurement and Suspension and Debarment Program Name of Federal Program (CFDA Number) Health Centers Cluster: Consolidated Health Centers (93.224) Grants for Newly Expanded Services under the Health Care Program (93.527) Criteria - Recipients of federal awards must follow the procurement standards set out at 2 CFR section 200.317 through 200.326. They must use their own documented procurement procedures, which reflect applicable State laws and regulations, provided that the procedures conform to applicable Federal law and the procurement requirements identified in 2 CFR part 200. Recipients ?must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price? 2 CFR section 200.318(i). The Center?s procurement procedures include the requirement to maintain sufficient documentation of the history of procurement. The Center also has procedures to identify procurement transactions requiring competitive bids or proposals. Context and Condition - We selected four contracts/purchases to test for compliance with procurement standards. Records for two contracts lacked documentation sufficient to detail procurement history. Cause - The Center did not follow its documentation policy for obtaining contracts or bids. Effect - A potential failure to conduct procurement transactions in a manner providing full and open competition exists. Questioned Costs - No costs were questioned. Repeat Finding - No. Statistically valid - Yes. Recommendation - We recommend the Center ensure it 1) maintains documentation of the history of procurement and 2) monitors compliance with documentation requirements. Views of responsible officials - The Center will review its procurement policies and internal controls and ensure timely action is taken when noncompliance is identified.
U.S. Department of Health and Human Services 2022-002 Procurement and Suspension and Debarment Program Name of Federal Program (CFDA Number) Health Centers Cluster: Consolidated Health Centers (93.224) Grants for Newly Expanded Services under the Health Care Program (93.527) Criteria - Recipients of federal awards must follow the procurement standards set out at 2 CFR section 200.317 through 200.326. They must use their own documented procurement procedures, which reflect applicable State laws and regulations, provided that the procedures conform to applicable Federal law and the procurement requirements identified in 2 CFR part 200. Recipients ?must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price? 2 CFR section 200.318(i). The Center?s procurement procedures include the requirement to maintain sufficient documentation of the history of procurement. The Center also has procedures to identify procurement transactions requiring competitive bids or proposals. Context and Condition - We selected four contracts/purchases to test for compliance with procurement standards. Records for two contracts lacked documentation sufficient to detail procurement history. Cause - The Center did not follow its documentation policy for obtaining contracts or bids. Effect - A potential failure to conduct procurement transactions in a manner providing full and open competition exists. Questioned Costs - No costs were questioned. Repeat Finding - No. Statistically valid - Yes. Recommendation - We recommend the Center ensure it 1) maintains documentation of the history of procurement and 2) monitors compliance with documentation requirements. Views of responsible officials - The Center will review its procurement policies and internal controls and ensure timely action is taken when noncompliance is identified.
Finding No. 2022-006 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They may use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurements confirm to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Further, KCHC’s procurement policy requires the following: • For small purchases between $10,001 to $250,000, price or rate quotes must be obtained from an adequate number of sources (at least two) and all quotes, including phone calls, web searches, etc., must be documented and kept on file. • To be allowable under a federal award, costs must be reasonable, allocable, and adequately documented and consistent with federal cost principles. Condition: Of forty non-payroll expenditures tested, aggregating $234,183 of a total population of $770,029, the following were noted: 1. For six (or 15%), supporting procurement package was not sufficient to demonstrate price or rate quotes had been obtained from an adequate number of sources. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Condition, continued: 2. For one (or 3%), no contractual agreement between KCHC and the vendor was provided to the audit team (invoice nos. 1235 and 1351 totaling $3,000 and $1,200, respectively). 3. For one (or 3%), supporting procurement package was not sufficient to support open and fair competition for document no. 2834 totaling $1,215. 4. For 11 (or 28%), no purchase order was provided. Cause: KCHC did not enforce recordkeeping and monitoring controls over compliance with applicable procurement and suspension and debarment requirements. Effect: KCHC is in noncompliance with applicable procurement requirements and questioned costs of $126,567 result. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Effect, continued: Identification as a Repeat Finding: Finding No. 2021-006 Recommendation: Responsible personnel should establish a recordkeeping system whereby underlying support for each transaction is processed timely and is filed to facilitate easy retrieval substantiating procurement compliance. In addition, responsible personnel should enforce compliance with procurement regulations. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding. Refer to separate Corrective Action Plan.
Finding No. 2022-006 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They may use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurements confirm to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Further, KCHC’s procurement policy requires the following: • For small purchases between $10,001 to $250,000, price or rate quotes must be obtained from an adequate number of sources (at least two) and all quotes, including phone calls, web searches, etc., must be documented and kept on file. • To be allowable under a federal award, costs must be reasonable, allocable, and adequately documented and consistent with federal cost principles. Condition: Of forty non-payroll expenditures tested, aggregating $234,183 of a total population of $770,029, the following were noted: 1. For six (or 15%), supporting procurement package was not sufficient to demonstrate price or rate quotes had been obtained from an adequate number of sources. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Condition, continued: 2. For one (or 3%), no contractual agreement between KCHC and the vendor was provided to the audit team (invoice nos. 1235 and 1351 totaling $3,000 and $1,200, respectively). 3. For one (or 3%), supporting procurement package was not sufficient to support open and fair competition for document no. 2834 totaling $1,215. 4. For 11 (or 28%), no purchase order was provided. Cause: KCHC did not enforce recordkeeping and monitoring controls over compliance with applicable procurement and suspension and debarment requirements. Effect: KCHC is in noncompliance with applicable procurement requirements and questioned costs of $126,567 result. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Effect, continued: Identification as a Repeat Finding: Finding No. 2021-006 Recommendation: Responsible personnel should establish a recordkeeping system whereby underlying support for each transaction is processed timely and is filed to facilitate easy retrieval substantiating procurement compliance. In addition, responsible personnel should enforce compliance with procurement regulations. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding. Refer to separate Corrective Action Plan.
Finding No. 2022-006 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They may use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurements confirm to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Further, KCHC’s procurement policy requires the following: • For small purchases between $10,001 to $250,000, price or rate quotes must be obtained from an adequate number of sources (at least two) and all quotes, including phone calls, web searches, etc., must be documented and kept on file. • To be allowable under a federal award, costs must be reasonable, allocable, and adequately documented and consistent with federal cost principles. Condition: Of forty non-payroll expenditures tested, aggregating $234,183 of a total population of $770,029, the following were noted: 1. For six (or 15%), supporting procurement package was not sufficient to demonstrate price or rate quotes had been obtained from an adequate number of sources. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Condition, continued: 2. For one (or 3%), no contractual agreement between KCHC and the vendor was provided to the audit team (invoice nos. 1235 and 1351 totaling $3,000 and $1,200, respectively). 3. For one (or 3%), supporting procurement package was not sufficient to support open and fair competition for document no. 2834 totaling $1,215. 4. For 11 (or 28%), no purchase order was provided. Cause: KCHC did not enforce recordkeeping and monitoring controls over compliance with applicable procurement and suspension and debarment requirements. Effect: KCHC is in noncompliance with applicable procurement requirements and questioned costs of $126,567 result. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Effect, continued: Identification as a Repeat Finding: Finding No. 2021-006 Recommendation: Responsible personnel should establish a recordkeeping system whereby underlying support for each transaction is processed timely and is filed to facilitate easy retrieval substantiating procurement compliance. In addition, responsible personnel should enforce compliance with procurement regulations. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding. Refer to separate Corrective Action Plan.
U.S. Department of Health and Human Services 2022-002 Procurement and Suspension and Debarment Program Name of Federal Program (CFDA Number) Health Centers Cluster: Consolidated Health Centers (93.224) Grants for Newly Expanded Services under the Health Care Program (93.527) Criteria - Recipients of federal awards must follow the procurement standards set out at 2 CFR section 200.317 through 200.326. They must use their own documented procurement procedures, which reflect applicable State laws and regulations, provided that the procedures conform to applicable Federal law and the procurement requirements identified in 2 CFR part 200. Recipients ?must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price? 2 CFR section 200.318(i). The Center?s procurement procedures include the requirement to maintain sufficient documentation of the history of procurement. The Center also has procedures to identify procurement transactions requiring competitive bids or proposals. Context and Condition - We selected four contracts/purchases to test for compliance with procurement standards. Records for two contracts lacked documentation sufficient to detail procurement history. Cause - The Center did not follow its documentation policy for obtaining contracts or bids. Effect - A potential failure to conduct procurement transactions in a manner providing full and open competition exists. Questioned Costs - No costs were questioned. Repeat Finding - No. Statistically valid - Yes. Recommendation - We recommend the Center ensure it 1) maintains documentation of the history of procurement and 2) monitors compliance with documentation requirements. Views of responsible officials - The Center will review its procurement policies and internal controls and ensure timely action is taken when noncompliance is identified.
U.S. Department of Health and Human Services 2022-002 Procurement and Suspension and Debarment Program Name of Federal Program (CFDA Number) Health Centers Cluster: Consolidated Health Centers (93.224) Grants for Newly Expanded Services under the Health Care Program (93.527) Criteria - Recipients of federal awards must follow the procurement standards set out at 2 CFR section 200.317 through 200.326. They must use their own documented procurement procedures, which reflect applicable State laws and regulations, provided that the procedures conform to applicable Federal law and the procurement requirements identified in 2 CFR part 200. Recipients ?must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price? 2 CFR section 200.318(i). The Center?s procurement procedures include the requirement to maintain sufficient documentation of the history of procurement. The Center also has procedures to identify procurement transactions requiring competitive bids or proposals. Context and Condition - We selected four contracts/purchases to test for compliance with procurement standards. Records for two contracts lacked documentation sufficient to detail procurement history. Cause - The Center did not follow its documentation policy for obtaining contracts or bids. Effect - A potential failure to conduct procurement transactions in a manner providing full and open competition exists. Questioned Costs - No costs were questioned. Repeat Finding - No. Statistically valid - Yes. Recommendation - We recommend the Center ensure it 1) maintains documentation of the history of procurement and 2) monitors compliance with documentation requirements. Views of responsible officials - The Center will review its procurement policies and internal controls and ensure timely action is taken when noncompliance is identified.
Finding No. 2022-006 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They may use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurements confirm to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Further, KCHC’s procurement policy requires the following: • For small purchases between $10,001 to $250,000, price or rate quotes must be obtained from an adequate number of sources (at least two) and all quotes, including phone calls, web searches, etc., must be documented and kept on file. • To be allowable under a federal award, costs must be reasonable, allocable, and adequately documented and consistent with federal cost principles. Condition: Of forty non-payroll expenditures tested, aggregating $234,183 of a total population of $770,029, the following were noted: 1. For six (or 15%), supporting procurement package was not sufficient to demonstrate price or rate quotes had been obtained from an adequate number of sources. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Condition, continued: 2. For one (or 3%), no contractual agreement between KCHC and the vendor was provided to the audit team (invoice nos. 1235 and 1351 totaling $3,000 and $1,200, respectively). 3. For one (or 3%), supporting procurement package was not sufficient to support open and fair competition for document no. 2834 totaling $1,215. 4. For 11 (or 28%), no purchase order was provided. Cause: KCHC did not enforce recordkeeping and monitoring controls over compliance with applicable procurement and suspension and debarment requirements. Effect: KCHC is in noncompliance with applicable procurement requirements and questioned costs of $126,567 result. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Effect, continued: Identification as a Repeat Finding: Finding No. 2021-006 Recommendation: Responsible personnel should establish a recordkeeping system whereby underlying support for each transaction is processed timely and is filed to facilitate easy retrieval substantiating procurement compliance. In addition, responsible personnel should enforce compliance with procurement regulations. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding. Refer to separate Corrective Action Plan.
Finding No. 2022-006 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They may use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurements confirm to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Further, KCHC’s procurement policy requires the following: • For small purchases between $10,001 to $250,000, price or rate quotes must be obtained from an adequate number of sources (at least two) and all quotes, including phone calls, web searches, etc., must be documented and kept on file. • To be allowable under a federal award, costs must be reasonable, allocable, and adequately documented and consistent with federal cost principles. Condition: Of forty non-payroll expenditures tested, aggregating $234,183 of a total population of $770,029, the following were noted: 1. For six (or 15%), supporting procurement package was not sufficient to demonstrate price or rate quotes had been obtained from an adequate number of sources. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Condition, continued: 2. For one (or 3%), no contractual agreement between KCHC and the vendor was provided to the audit team (invoice nos. 1235 and 1351 totaling $3,000 and $1,200, respectively). 3. For one (or 3%), supporting procurement package was not sufficient to support open and fair competition for document no. 2834 totaling $1,215. 4. For 11 (or 28%), no purchase order was provided. Cause: KCHC did not enforce recordkeeping and monitoring controls over compliance with applicable procurement and suspension and debarment requirements. Effect: KCHC is in noncompliance with applicable procurement requirements and questioned costs of $126,567 result. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Effect, continued: Identification as a Repeat Finding: Finding No. 2021-006 Recommendation: Responsible personnel should establish a recordkeeping system whereby underlying support for each transaction is processed timely and is filed to facilitate easy retrieval substantiating procurement compliance. In addition, responsible personnel should enforce compliance with procurement regulations. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding. Refer to separate Corrective Action Plan.
Finding No. 2022-006 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They may use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurements confirm to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Further, KCHC’s procurement policy requires the following: • For small purchases between $10,001 to $250,000, price or rate quotes must be obtained from an adequate number of sources (at least two) and all quotes, including phone calls, web searches, etc., must be documented and kept on file. • To be allowable under a federal award, costs must be reasonable, allocable, and adequately documented and consistent with federal cost principles. Condition: Of forty non-payroll expenditures tested, aggregating $234,183 of a total population of $770,029, the following were noted: 1. For six (or 15%), supporting procurement package was not sufficient to demonstrate price or rate quotes had been obtained from an adequate number of sources. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Condition, continued: 2. For one (or 3%), no contractual agreement between KCHC and the vendor was provided to the audit team (invoice nos. 1235 and 1351 totaling $3,000 and $1,200, respectively). 3. For one (or 3%), supporting procurement package was not sufficient to support open and fair competition for document no. 2834 totaling $1,215. 4. For 11 (or 28%), no purchase order was provided. Cause: KCHC did not enforce recordkeeping and monitoring controls over compliance with applicable procurement and suspension and debarment requirements. Effect: KCHC is in noncompliance with applicable procurement requirements and questioned costs of $126,567 result. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Effect, continued: Identification as a Repeat Finding: Finding No. 2021-006 Recommendation: Responsible personnel should establish a recordkeeping system whereby underlying support for each transaction is processed timely and is filed to facilitate easy retrieval substantiating procurement compliance. In addition, responsible personnel should enforce compliance with procurement regulations. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding. Refer to separate Corrective Action Plan.
Federal Agency: U.S. Department of Agriculture Federal Program Name: Child and Adult Care Food Program Assistance Listing Number: 10.558 Pass-Through Agency: Feeding Our Future Award Period: February 2021 – December 2021 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Adverse Opinion) Criteria or specific requirement: Nonfederal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations. Under these procurement standards, there must be written standards of conduct for employees involved in contracting, procurement transactions must be conducted in a manner providing full and open competition, and certain methods must be followed for soliciting bids or pricing. Additionally, under 2 CFR Part 180, which implements Executive Orders 12549 and 12689, nonfederal entities are prohibited from contracting with parties that are suspended or debarred and must follow certain procedures to verify that an entity is not suspended or debarred when it enters into a contract. Condition: The Organization does not have a procurement policy which complies with procurement requirements noted above. The organization did not have documentation supporting the selection of the vendors used for the program. Procurements did not provide full and open competition. There were not procedures to verify that an entity was not debarred, suspended, or otherwise excluded. Additionally, contracts did not contain required elements, such as pricing, type of meals, delivery, and schedule. The contract utilized for the largest vendor was very brief and did not follow the template contract that the State of Minnesota recommends. Questioned costs: Unknown Context: There were three vendors utilized for food purchases in the following amounts: (1) $2,276,877; (2) $325,801; and (3) $254,843. For all three vendors, no procurement or suspension and debarment procedures were performed. Cause: The Organization was not aware it was required to perform procurement or suspension and debarment procedures. Management indicated the contracting processes used were approved by its sponsor organization. Effect: It is unclear if the Organization received competitive pricing for its federal grant purchases. The auditors verified that vendors were not listed as suspended or debarred. Recommendation: We recommend the Organization familiarize itself with the procurement regulations prior to entering into any future federal grants and review state and federal guidance. Views of responsible officials: This program was initiated during the height of COVID, when guidelines on both state and federal levels were changing rapidly. Management provided auditors with documentation about vendors that had been approved by the sponsor organization. Management attended all trainings provided by the sponsor organization and followed all of the program sponsor guidelines. See the Corrective Action Plan for further details.
2021-004: Procurement and Suspension and Debarment: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the procurement for five items selected for testing. Criteria: The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. The requirements that apply to procurement under cost-reimbursement contracts under the FAR are contained in 48 CFR parts 03, 15, 44 and the clauses at 48 CFR sections 52.244-2, 52.244-5, 52.203-13, 52.203-16, and 52.215-12; agency FAR Supplements; and the terms and conditions of the contract. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have expenses that were paid that did not meet their own procurement policy. Cause: The Organization did not have good controls on ensuring the procurement requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate that all expenses meet their procurement policy. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
2021-004: Procurement and Suspension and Debarment: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the procurement for five items selected for testing. Criteria: The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. The requirements that apply to procurement under cost-reimbursement contracts under the FAR are contained in 48 CFR parts 03, 15, 44 and the clauses at 48 CFR sections 52.244-2, 52.244-5, 52.203-13, 52.203-16, and 52.215-12; agency FAR Supplements; and the terms and conditions of the contract. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have expenses that were paid that did not meet their own procurement policy. Cause: The Organization did not have good controls on ensuring the procurement requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate that all expenses meet their procurement policy. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
2021-004: Procurement and Suspension and Debarment: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the procurement for five items selected for testing. Criteria: The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. The requirements that apply to procurement under cost-reimbursement contracts under the FAR are contained in 48 CFR parts 03, 15, 44 and the clauses at 48 CFR sections 52.244-2, 52.244-5, 52.203-13, 52.203-16, and 52.215-12; agency FAR Supplements; and the terms and conditions of the contract. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have expenses that were paid that did not meet their own procurement policy. Cause: The Organization did not have good controls on ensuring the procurement requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate that all expenses meet their procurement policy. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
2021-004: Procurement and Suspension and Debarment: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the procurement for five items selected for testing. Criteria: The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. The requirements that apply to procurement under cost-reimbursement contracts under the FAR are contained in 48 CFR parts 03, 15, 44 and the clauses at 48 CFR sections 52.244-2, 52.244-5, 52.203-13, 52.203-16, and 52.215-12; agency FAR Supplements; and the terms and conditions of the contract. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have expenses that were paid that did not meet their own procurement policy. Cause: The Organization did not have good controls on ensuring the procurement requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate that all expenses meet their procurement policy. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: United States Department of Treasury Program Titles: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Entity: King County Award Numbers: 6200091 Award Periods: January 1, 2021 through December 31, 2024 Criteria Internal control requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance), Subpart D ‐ Post Federal Award Requirements, Section 200.318 through 200.326 Internal Controls, require that a non‐Federal entity 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 requirement identified in 2 CFR Part 200. The procurement procedures must include the following: - Using the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). - For acquisitions exceeding the simplified acquisition threshold, using one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of the circumstances are met, in accordance with 2 CFR section 200.320(c)). - Using Noncompetitive procurement only if one or more of the following circumstances apply: · The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; · The item is available only from a single source; · The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; - The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or ∙ After solicitation of a number of sources, competition is determined inadequate PDA’s procurement policy also requires a verification that vendors and sub-recipient are not suspended or debarred by checking the website of the System for Award Management and documentation of such verification maintained by the Finance Office. Condition/Context While PDA has established a procurement policy, it does not fully conform to Federal law and the Uniform Guidance for the following reasons: - Micro purchase threshold is not explicitly defined, although it is mentioned that cost and price analysis shall be made and documented in connection with every procurement action above $5,000. - The policy does not clear provisions for maintaining detailed procurement records. Such records should include the rationale for the procurement method, the selection of contract type, the contractor selection or rejection process, and the basis for the contract price. - The simplified acquisition threshold is not defined and does not incorporate all relevant elements including sealed bids method. During our testing of 3 procurement transactions from a total of 20, we observed that, despite management's detailed historical background on each of the selected the necessary documentation evidencing compliance with PDA’s procurement standards was not retained. All the transactions tested were noncompetitive and thus single sourced. The total misstatement from these three transactions amounted to approximately $56,000 out of a total population of about $186,491. Furthermore, for these three vendors, which represented a 100% sample, we found no evidence of documentation for suspension and debarment verification. Although discussions with management suggested that all these transactions were properly conceived and evaluated at the time, there was no contemporaneous documentation to support this. Cause PDA’s procurement policy does not seem to have been reviewed against the Uniform Guidance for compliance. Internal controls over maintaining sufficient records to detail the history of procurement including noncompetitive justification and suspension and debarment verification were found to be insufficient. Effect The policy did not fully conformed to the Uniform Guidance resulting to noncompliance issues such as records not sufficient to detail the history of procurement transactions. Questioned Costs $186,491 Repeat Finding No. Recommendation We recommend PDA implement measures to ensure that its procurement policy reflect applicable state and local laws and regulations conforming to applicable federal statutes and requirement in 2 CFR part 200. Management should ensure procurement transactions are documented in such detail to evidence the method of procurement use and vendor verification for suspension and debarment.
Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: United States Department of Treasury Program Titles: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Entity: King County Award Numbers: 6200091 Award Periods: January 1, 2021 through December 31, 2024 Criteria Internal control requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance), Subpart D ‐ Post Federal Award Requirements, Section 200.318 through 200.326 Internal Controls, require that a non‐Federal entity 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 requirement identified in 2 CFR Part 200. The procurement procedures must include the following: - Using the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). - For acquisitions exceeding the simplified acquisition threshold, using one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of the circumstances are met, in accordance with 2 CFR section 200.320(c)). - Using Noncompetitive procurement only if one or more of the following circumstances apply: · The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; · The item is available only from a single source; · The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; - The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or ∙ After solicitation of a number of sources, competition is determined inadequate PDA’s procurement policy also requires a verification that vendors and sub-recipient are not suspended or debarred by checking the website of the System for Award Management and documentation of such verification maintained by the Finance Office. Condition/Context While PDA has established a procurement policy, it does not fully conform to Federal law and the Uniform Guidance for the following reasons: - Micro purchase threshold is not explicitly defined, although it is mentioned that cost and price analysis shall be made and documented in connection with every procurement action above $5,000. - The policy does not clear provisions for maintaining detailed procurement records. Such records should include the rationale for the procurement method, the selection of contract type, the contractor selection or rejection process, and the basis for the contract price. - The simplified acquisition threshold is not defined and does not incorporate all relevant elements including sealed bids method. During our testing of 3 procurement transactions from a total of 20, we observed that, despite management's detailed historical background on each of the selected the necessary documentation evidencing compliance with PDA’s procurement standards was not retained. All the transactions tested were noncompetitive and thus single sourced. The total misstatement from these three transactions amounted to approximately $56,000 out of a total population of about $186,491. Furthermore, for these three vendors, which represented a 100% sample, we found no evidence of documentation for suspension and debarment verification. Although discussions with management suggested that all these transactions were properly conceived and evaluated at the time, there was no contemporaneous documentation to support this. Cause PDA’s procurement policy does not seem to have been reviewed against the Uniform Guidance for compliance. Internal controls over maintaining sufficient records to detail the history of procurement including noncompetitive justification and suspension and debarment verification were found to be insufficient. Effect The policy did not fully conformed to the Uniform Guidance resulting to noncompliance issues such as records not sufficient to detail the history of procurement transactions. Questioned Costs $186,491 Repeat Finding No. Recommendation We recommend PDA implement measures to ensure that its procurement policy reflect applicable state and local laws and regulations conforming to applicable federal statutes and requirement in 2 CFR part 200. Management should ensure procurement transactions are documented in such detail to evidence the method of procurement use and vendor verification for suspension and debarment.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC- 1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2021-007 PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2021. CUAHSI did not complete the verification of its 2021 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Material Weakness Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2020-007. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC- 1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2021-007 PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2021. CUAHSI did not complete the verification of its 2021 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Material Weakness Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2020-007. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC- 1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2021-007 PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2021. CUAHSI did not complete the verification of its 2021 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Material Weakness Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2020-007. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC- 1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2021-007 PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2021. CUAHSI did not complete the verification of its 2021 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Material Weakness Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2020-007. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC- 1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2021-007 PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2021. CUAHSI did not complete the verification of its 2021 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Material Weakness Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2020-007. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal Agency: U.S. Department of Agriculture Federal Program Name: Child and Adult Care Food Program Assistance Listing Number: 10.558 Pass-Through Agency: Feeding Our Future Award Period: February 2021 – December 2021 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Adverse Opinion) Criteria or specific requirement: Nonfederal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations. Under these procurement standards, there must be written standards of conduct for employees involved in contracting, procurement transactions must be conducted in a manner providing full and open competition, and certain methods must be followed for soliciting bids or pricing. Additionally, under 2 CFR Part 180, which implements Executive Orders 12549 and 12689, nonfederal entities are prohibited from contracting with parties that are suspended or debarred and must follow certain procedures to verify that an entity is not suspended or debarred when it enters into a contract. Condition: The Organization does not have a procurement policy which complies with procurement requirements noted above. The organization did not have documentation supporting the selection of the vendors used for the program. Procurements did not provide full and open competition. There were not procedures to verify that an entity was not debarred, suspended, or otherwise excluded. Additionally, contracts did not contain required elements, such as pricing, type of meals, delivery, and schedule. The contract utilized for the largest vendor was very brief and did not follow the template contract that the State of Minnesota recommends. Questioned costs: Unknown Context: There were three vendors utilized for food purchases in the following amounts: (1) $2,276,877; (2) $325,801; and (3) $254,843. For all three vendors, no procurement or suspension and debarment procedures were performed. Cause: The Organization was not aware it was required to perform procurement or suspension and debarment procedures. Management indicated the contracting processes used were approved by its sponsor organization. Effect: It is unclear if the Organization received competitive pricing for its federal grant purchases. The auditors verified that vendors were not listed as suspended or debarred. Recommendation: We recommend the Organization familiarize itself with the procurement regulations prior to entering into any future federal grants and review state and federal guidance. Views of responsible officials: This program was initiated during the height of COVID, when guidelines on both state and federal levels were changing rapidly. Management provided auditors with documentation about vendors that had been approved by the sponsor organization. Management attended all trainings provided by the sponsor organization and followed all of the program sponsor guidelines. See the Corrective Action Plan for further details.
2021-004: Procurement and Suspension and Debarment: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the procurement for five items selected for testing. Criteria: The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. The requirements that apply to procurement under cost-reimbursement contracts under the FAR are contained in 48 CFR parts 03, 15, 44 and the clauses at 48 CFR sections 52.244-2, 52.244-5, 52.203-13, 52.203-16, and 52.215-12; agency FAR Supplements; and the terms and conditions of the contract. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have expenses that were paid that did not meet their own procurement policy. Cause: The Organization did not have good controls on ensuring the procurement requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate that all expenses meet their procurement policy. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
2021-004: Procurement and Suspension and Debarment: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the procurement for five items selected for testing. Criteria: The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. The requirements that apply to procurement under cost-reimbursement contracts under the FAR are contained in 48 CFR parts 03, 15, 44 and the clauses at 48 CFR sections 52.244-2, 52.244-5, 52.203-13, 52.203-16, and 52.215-12; agency FAR Supplements; and the terms and conditions of the contract. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have expenses that were paid that did not meet their own procurement policy. Cause: The Organization did not have good controls on ensuring the procurement requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate that all expenses meet their procurement policy. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
2021-004: Procurement and Suspension and Debarment: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the procurement for five items selected for testing. Criteria: The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. The requirements that apply to procurement under cost-reimbursement contracts under the FAR are contained in 48 CFR parts 03, 15, 44 and the clauses at 48 CFR sections 52.244-2, 52.244-5, 52.203-13, 52.203-16, and 52.215-12; agency FAR Supplements; and the terms and conditions of the contract. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have expenses that were paid that did not meet their own procurement policy. Cause: The Organization did not have good controls on ensuring the procurement requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate that all expenses meet their procurement policy. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
2021-004: Procurement and Suspension and Debarment: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the procurement for five items selected for testing. Criteria: The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. The requirements that apply to procurement under cost-reimbursement contracts under the FAR are contained in 48 CFR parts 03, 15, 44 and the clauses at 48 CFR sections 52.244-2, 52.244-5, 52.203-13, 52.203-16, and 52.215-12; agency FAR Supplements; and the terms and conditions of the contract. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have expenses that were paid that did not meet their own procurement policy. Cause: The Organization did not have good controls on ensuring the procurement requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate that all expenses meet their procurement policy. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: United States Department of Treasury Program Titles: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Entity: King County Award Numbers: 6200091 Award Periods: January 1, 2021 through December 31, 2024 Criteria Internal control requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance), Subpart D ‐ Post Federal Award Requirements, Section 200.318 through 200.326 Internal Controls, require that a non‐Federal entity 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 requirement identified in 2 CFR Part 200. The procurement procedures must include the following: - Using the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). - For acquisitions exceeding the simplified acquisition threshold, using one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of the circumstances are met, in accordance with 2 CFR section 200.320(c)). - Using Noncompetitive procurement only if one or more of the following circumstances apply: · The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; · The item is available only from a single source; · The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; - The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or ∙ After solicitation of a number of sources, competition is determined inadequate PDA’s procurement policy also requires a verification that vendors and sub-recipient are not suspended or debarred by checking the website of the System for Award Management and documentation of such verification maintained by the Finance Office. Condition/Context While PDA has established a procurement policy, it does not fully conform to Federal law and the Uniform Guidance for the following reasons: - Micro purchase threshold is not explicitly defined, although it is mentioned that cost and price analysis shall be made and documented in connection with every procurement action above $5,000. - The policy does not clear provisions for maintaining detailed procurement records. Such records should include the rationale for the procurement method, the selection of contract type, the contractor selection or rejection process, and the basis for the contract price. - The simplified acquisition threshold is not defined and does not incorporate all relevant elements including sealed bids method. During our testing of 3 procurement transactions from a total of 20, we observed that, despite management's detailed historical background on each of the selected the necessary documentation evidencing compliance with PDA’s procurement standards was not retained. All the transactions tested were noncompetitive and thus single sourced. The total misstatement from these three transactions amounted to approximately $56,000 out of a total population of about $186,491. Furthermore, for these three vendors, which represented a 100% sample, we found no evidence of documentation for suspension and debarment verification. Although discussions with management suggested that all these transactions were properly conceived and evaluated at the time, there was no contemporaneous documentation to support this. Cause PDA’s procurement policy does not seem to have been reviewed against the Uniform Guidance for compliance. Internal controls over maintaining sufficient records to detail the history of procurement including noncompetitive justification and suspension and debarment verification were found to be insufficient. Effect The policy did not fully conformed to the Uniform Guidance resulting to noncompliance issues such as records not sufficient to detail the history of procurement transactions. Questioned Costs $186,491 Repeat Finding No. Recommendation We recommend PDA implement measures to ensure that its procurement policy reflect applicable state and local laws and regulations conforming to applicable federal statutes and requirement in 2 CFR part 200. Management should ensure procurement transactions are documented in such detail to evidence the method of procurement use and vendor verification for suspension and debarment.
Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: United States Department of Treasury Program Titles: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Entity: King County Award Numbers: 6200091 Award Periods: January 1, 2021 through December 31, 2024 Criteria Internal control requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance), Subpart D ‐ Post Federal Award Requirements, Section 200.318 through 200.326 Internal Controls, require that a non‐Federal entity 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 requirement identified in 2 CFR Part 200. The procurement procedures must include the following: - Using the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). - For acquisitions exceeding the simplified acquisition threshold, using one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of the circumstances are met, in accordance with 2 CFR section 200.320(c)). - Using Noncompetitive procurement only if one or more of the following circumstances apply: · The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; · The item is available only from a single source; · The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; - The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or ∙ After solicitation of a number of sources, competition is determined inadequate PDA’s procurement policy also requires a verification that vendors and sub-recipient are not suspended or debarred by checking the website of the System for Award Management and documentation of such verification maintained by the Finance Office. Condition/Context While PDA has established a procurement policy, it does not fully conform to Federal law and the Uniform Guidance for the following reasons: - Micro purchase threshold is not explicitly defined, although it is mentioned that cost and price analysis shall be made and documented in connection with every procurement action above $5,000. - The policy does not clear provisions for maintaining detailed procurement records. Such records should include the rationale for the procurement method, the selection of contract type, the contractor selection or rejection process, and the basis for the contract price. - The simplified acquisition threshold is not defined and does not incorporate all relevant elements including sealed bids method. During our testing of 3 procurement transactions from a total of 20, we observed that, despite management's detailed historical background on each of the selected the necessary documentation evidencing compliance with PDA’s procurement standards was not retained. All the transactions tested were noncompetitive and thus single sourced. The total misstatement from these three transactions amounted to approximately $56,000 out of a total population of about $186,491. Furthermore, for these three vendors, which represented a 100% sample, we found no evidence of documentation for suspension and debarment verification. Although discussions with management suggested that all these transactions were properly conceived and evaluated at the time, there was no contemporaneous documentation to support this. Cause PDA’s procurement policy does not seem to have been reviewed against the Uniform Guidance for compliance. Internal controls over maintaining sufficient records to detail the history of procurement including noncompetitive justification and suspension and debarment verification were found to be insufficient. Effect The policy did not fully conformed to the Uniform Guidance resulting to noncompliance issues such as records not sufficient to detail the history of procurement transactions. Questioned Costs $186,491 Repeat Finding No. Recommendation We recommend PDA implement measures to ensure that its procurement policy reflect applicable state and local laws and regulations conforming to applicable federal statutes and requirement in 2 CFR part 200. Management should ensure procurement transactions are documented in such detail to evidence the method of procurement use and vendor verification for suspension and debarment.