Finding No. 2024-036 Federal Awarding Agency: U.S. Department of Homeland Security (USDHS) Impact: Significant Deficiency, Noncompliance AL Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) – COVID-19 Federal Award Number: 4413DRAKP00000001, 4533DRAKP00000001, 4585DRAKP00000001, 4646DRAKP00000001, 4667DRAKP00000001 Applicable Compliance Requirement: Allowable Costs/Cost Principles Condition: A review of 25 FY 24 Disaster Grants payments found that 14 payments (56 percent) lacked required supporting documentation. Specifically, six payments lacked pay policy and/or fringe benefit calculations and eight payments lacked procurement contracts that included all federal requirements. Additionally, two of the eight payments lacked a complete or signed contract on file. Context: The Federal Emergency Management Agency (FEMA) reimburses force account labor based on actual hourly rates plus the cost of the employee’s actual fringe benefits. The applicant is required to submit the following documentation to support labor costs claimed: summary of actual costs for completed work, individual information (such as name, job title, type of employee, days and hours worked, pay rate and fringe benefit rate, and a description of work performed), fringe benefit calculation, and pay policy. FEMA determines the eligibility of overtime, premium pay, and compensatory time costs based on the applicant’s pre-disaster written pay policy. Six of the 25 transactions included force account labor that was not supported by a pay policy or benefit calculation. FEMA provides public assistance funding for contract costs based on the terms of the contract if the applicant meets federal procurement and contracting requirements. The applicant must include required provisions detailed in Title 2 CFR 200.327 in all contracts awarded and maintain oversight to ensure that contractors perform according to the conditions and specifications of the contract. FEMA reimburses funding for contract costs based on the terms of the contract if the applicant meets federal procurement and contract requirements. Eight of the 25 transactions included contractor payments and, based on review of the contract, not all federally required provisions were included. Two of the eight were not supported by a signed contract. According to DMVA management, contractors were utilized to provide project management of the federal disasters due to an increased workload and a lack of available DMVA staff. Contractors were tasked with gathering the required documents to ensure projects were administered in accordance with FEMA requirements. Cause: Division of Homeland Security and Emergency Management (DHSEM) lacked written procedures for monitoring contractors. Also, due to staff turnover and an increase in workload, DHSEM management did not adequately monitor contractor’s work. Specifically, to ensure the contractor verified the contracts awarded by subrecipients included federal requirements, final signed contracts were provided to the state, and required documentation was received for the reimbursement of subrecipient force account labor costs. Criteria: Title 2 CFR 200.403(g) requires costs to be adequately documented. FEMA’s guidance for administering the program is detailed in the Public Assistance Program and Policy Guide (PAPPG), 2018, which requires labor costs to be supported by specific documentation: summary of actual costs for completed work; for each individual: name, job title and function, type of employee, days and hours worked, pay rates and fringe benefit rate, and description of work performed; fringe benefit calculations; and pay policy. The PAPPG also requires contracts to include the required provisions in Title 2 CFR 200.327 and Homeland Security Acquisition Regulation Class Deviation 15-01 clauses in all contracts awarded. Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Effect: Lack of fringe benefit calculations and pay policy may result in FEMA limiting public assistance funding to the applicant non-discretionary, uniformly applied pay rates. Inadequate documentation may result in unallowable costs. Noncompliance with federal regulations may result in the federal awarding agency imposing additional conditions or taking corrective action, including additional reporting requirements or withholding/terminating funding. Questioned Costs: AL - 97.036: $96,758 AL - 97.036 COVID-19: $2,159 Recommendation: DHSEM’s director should develop written procedures for adequately monitoring DMVA contractors to ensure all federally required documentation is obtained to support reimbursements to subrecipients. Views of Responsible Officials: Management agrees with this finding.
Finding: Procurement and Suspension & Debarment Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award Year: 2024 Award Number: G757HMWE8ET8 Criteria: In accordance with 2 CFR 200.318, non-Federal entities must have and use documented procurement procedures, consistent with State and local regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. The Organization's procurement policy requires for purchases in excess of $5,000 to obtain three competitive bids before purchase order is placed. In addition, it states that CFR 200's procurement standards are the guiding legislation. Condition: During testing of procurement and suspension & debarment, it was noted: a. Client could not provide support to show why the particular vendor was chosen. b. No mention of suspension or debarment checks are contained in the policies and no support for checks is maintained. Questioned Costs: $148,737; based on one item below that was tested for procurement and suspension & debarment. Context: One small purchase procurement vendor was selected which used CSLFRF funds during fiscal year 2024 in the amount of $148,737 and noted the above issues. A non-statistical sampling methodology was used to select the sample. Cause: The Organization did not have adequate documentation to support the Organizations procurement decisions. Effect: The Organization did not have adequate internal controls in place which resulted in a purchase without adherence to the Organization's own procurement policies and the Uniform Guidance. Identification as a repeat finding: Not a repeat finding. Recommendation: We recommend that the Organization follow its procurement procedures for the acquisition of property or services as required under a Federal award or sub-award. We also recommend updating the policies to include guidance for suspension and debarment checks as well as establishing ways to maintain documentation of those checks. Views of responsible officials: The Organization agrees with the finding. See separate report for planned corrective actions.
Finding: Procurement and Suspension & Debarment Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award Year: 2024 Award Number: G757HMWE8ET8 Criteria: In accordance with 2 CFR 200.318, non-Federal entities must have and use documented procurement procedures, consistent with State and local regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. The Organization's procurement policy requires for purchases in excess of $5,000 to obtain three competitive bids before purchase order is placed. In addition, it states that CFR 200's procurement standards are the guiding legislation. Condition: During testing of procurement and suspension & debarment, it was noted: a. Client could not provide support to show why the particular vendor was chosen. b. No mention of suspension or debarment checks are contained in the policies and no support for checks is maintained. Questioned Costs: $148,737; based on one item below that was tested for procurement and suspension & debarment. Context: One small purchase procurement vendor was selected which used CSLFRF funds during fiscal year 2024 in the amount of $148,737 and noted the above issues. A non-statistical sampling methodology was used to select the sample. Cause: The Organization did not have adequate documentation to support the Organizations procurement decisions. Effect: The Organization did not have adequate internal controls in place which resulted in a purchase without adherence to the Organization's own procurement policies and the Uniform Guidance. Identification as a repeat finding: Not a repeat finding. Recommendation: We recommend that the Organization follow its procurement procedures for the acquisition of property or services as required under a Federal award or sub-award. We also recommend updating the policies to include guidance for suspension and debarment checks as well as establishing ways to maintain documentation of those checks. Views of responsible officials: The Organization agrees with the finding. See separate report for planned corrective actions.
Finding Number: 2024-007 Program: Coronavirus State and Local Fiscal Recovery Funds ALN #: 21.027 Pass-through Entity: N/A- Direct Award Federal Agency: U.S. Department of Treasury Federal Awar Year: July 1, 2023–June 30, 2024 Compliance Requirement: Procurement Type of finding: Material weakness and noncompliance Criteria Recipients may use awarded funds to enter into contracts to procure goods and services necessary to implement one or more of the eligible purposes outlined in 42 USC sections 802(c) and 803(c) and Treasury’s 2021 Interim Final Rule, and 2022 Final Rule, and 2023 Interim Final Rule. 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 200.327. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. According to 2 CFR 200.303, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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). Condition For three of seven selections, we noted that the City did not follow the proper procurement policies as outlined in the Massachusetts General Law Chapter 30B. One exception related to a vendor that had cumulative expenditures greater than $10,000 in FY24. This vendor did not have a related contract for these expenditures and therefore the City did not follow procurement policies. Two additional exceptions relate to sole-source procurements with contract values greater than $50,000. Per Chapter 30B, sole-source procurements of more the $50,000 cannot be completed unless the contract relates to software maintenance, library books, and educational materials. These contracts did not relate to any of the beforementioned categories. Additionally, the City did not have documentation to show that a reasonable services. As such, a sole-source procurement method was not in compliance with Chapter 30B of the Massachusetts General Law. Cause The nature and reason for the noncompliance is attributed to oversight error on the City's part for not entering into contracts/maintaining procurement documentation appropriately. The City enters into hundreds of contracts annually funded with the ARPA program, all of which are manually reviewed. Therefore, it is likely that human error caused the noncompliance. Proper perspective The City’s policy is to follow the Massachusetts General Law Chapter 30B when procuring goods and services. Out of a sample size of seven, we noted that three of the vendors were not properly procured, as described in the conditions found. Possible asserted effect Not following the proper procurement policies, as outlined in Chapter 30B, could cause the City to inappropriately award a contract to a vendor. Questioned costs None noted Statistical sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat finding A similar finding was not reported in the prior year. Recommendation We recommend the City to review the procurement policies and ensure that expenditures for vendors that exceed $10,000 follow the correct procurement policies and procedures. Additionally, sole source bids require the City to follow certain policies and procedures. Views of responsible officials and corrective actions The City has updated its procurement process in FY2025 to ensure that expenditures for vendors that exceed $10,000 and sole source contracts follow the correct procurement policies and procedures in accordance with MGL 30B. investigation occurred that showed only one, or all vendors contracted with, could provide the required
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
2024-005 - Procurement and Suspension and Debarment Federal Program Information: Department of Treasury - State & Local Fiscal Recovery Fund ALN - 21.027 - State & Local Fiscal Recovery Fund Criteria: The following CFR(s) apply to this finding: 2 CFR §200.318(a) Condition: During our testing we reviewed the procurement policy for the City and identified multiple provisions required were not included in the policy. Cause: The control lapse occurred because there was turnover in key positions and the policy has not been reviewed. Effect: Procurement activities conducted under this incomplete policy may not adhere to required federal standards, increasing the risk of noncompliance, unallowable costs or procurement practices that do not ensure fair and open competition. Identification of Questioned Costs: None identified. Context: The procurement policy in effect during the fiscal year was reviewed which is not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the City revise its procurement policy to fully incorporate all elements required by 2 CFR §200.317-200.327. Additionally, we suggest the City implement a regular policy review process to ensure continued compliance with federal regulations. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the City.
2024-005 - Procurement and Suspension and Debarment Federal Program Information: Department of Treasury - State & Local Fiscal Recovery Fund ALN - 21.027 - State & Local Fiscal Recovery Fund Criteria: The following CFR(s) apply to this finding: 2 CFR §200.318(a) Condition: During our testing we reviewed the procurement policy for the City and identified multiple provisions required were not included in the policy. Cause: The control lapse occurred because there was turnover in key positions and the policy has not been reviewed. Effect: Procurement activities conducted under this incomplete policy may not adhere to required federal standards, increasing the risk of noncompliance, unallowable costs or procurement practices that do not ensure fair and open competition. Identification of Questioned Costs: None identified. Context: The procurement policy in effect during the fiscal year was reviewed which is not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the City revise its procurement policy to fully incorporate all elements required by 2 CFR §200.317-200.327. Additionally, we suggest the City implement a regular policy review process to ensure continued compliance with federal regulations. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the City.
2024-005 - Procurement and Suspension and Debarment Federal Program Information: Department of Treasury - State & Local Fiscal Recovery Fund ALN - 21.027 - State & Local Fiscal Recovery Fund Criteria: The following CFR(s) apply to this finding: 2 CFR §200.318(a) Condition: During our testing we reviewed the procurement policy for the City and identified multiple provisions required were not included in the policy. Cause: The control lapse occurred because there was turnover in key positions and the policy has not been reviewed. Effect: Procurement activities conducted under this incomplete policy may not adhere to required federal standards, increasing the risk of noncompliance, unallowable costs or procurement practices that do not ensure fair and open competition. Identification of Questioned Costs: None identified. Context: The procurement policy in effect during the fiscal year was reviewed which is not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the City revise its procurement policy to fully incorporate all elements required by 2 CFR §200.317-200.327. Additionally, we suggest the City implement a regular policy review process to ensure continued compliance with federal regulations. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the City.
Condition: Expenditures for federal programs did not follow the non-federal entities procedures before entering a covered transaction. Two (2) disbursements totaling $28,882 were not properly encumbered in accordance with state statute. Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are made in accordance with federal compliance requirements. Effect of Condition: This condition could result in noncompliance to grant requirements and could lead to a loss of federal funds to the County. Recommendation: OSAI recommends the County gain an understanding of the grant requirements for this program and implement internal controls to ensure compliance with these grant requirements. Management Response: Chairman of the Board of County Commissioners: I plan to communicate with the Budget Board regarding this finding and have already introduced to the Budget Board, a form guideline called “Payne County Grant Administration Plan” to aid in proper documentation, reporting and proper spending of all grant awards. County Clerk: The Payne County Budget Board has approved and adopted a Federal Funding Checklist as well as Federal Funding guidelines on agreements and awards. The Payne County Clerk’s office also communicates with each department and requests that they report to our office any Federal Grants and Awards they receive and report those on their SEFA annually to our office. We also communicate with the Treasurer’s office and request to know when any Federal money has been received. Criteria: Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds (8. Procurement, Suspension & Debarment.) reads as follows: Recipients are responsible for ensuring that any procurement using SLFRF funds, or payments under procurement contracts using such funds, are consistent with the procurement standards set forth in the Uniform Guidance at 2 CFR 200.317 through 2 CFR 200.327, unless stated otherwise by Treasury. As outlined in FAQ 13.15, only a subset of the Uniform Guidance requirements at 2 CFR Part 200 Subpart D (Post Federal AwardRequirements) applies to recipients’ use of funds in the revenue loss eligible use category. The procurement standards set forth in the Uniform Guidance at 2 CRF 200.317 through 2 CRF 200.327 are not included in FAQ 13.15’s list of applicable Subpart D requirements that apply to recipients’ use of funds in the revenue loss eligible use category. The Uniform Guidance establishes in 2 CFR 200.319 that all procurement transactions for property or services must be conducted in a manner providing full and open competition, consistent with standards outlined in 2 CFR 200.320, which allows for non-competitive procurements only in certain circumstances. Recipients must have and use documented procurement procedures that are consistent with the standards outlined in 2 CFR 200.317 through 2 CFR 200.320. In addition, the Uniform Guidance at 2 CFR 200.214, 2 CFR Part 180, and Treasury’s implementing regulations at 31 CFR Part 19, prohibit recipients from entering into contracts with suspended or debarred parties. The procurement standards outlined in the Uniform Guidance require an infrastructure for competitive bidding and contractor oversight, including maintaining written standards of conduct. Your organization must ensure adherence to all applicable local, State, and federal procurement laws and regulations. Further, 2 CFR § 200.319 Competition (d) reads as follows: The non-Federal entity must have written procedures for procurement transactions.
2024-005 Improve Internal Controls Over Procurement Federal Program(s) Information Federal Agency: Department of the Treasury Award Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: 2024 Compliance Requirement: Procurement Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement 2 CFR 200.318–200.327 requires the City to follow documented procurement procedures consistent with applicable Federal statutes, regulations, and the terms and conditions of their Federal award. The City must maintain records sufficient to detail the history of procurement, including, but not limited to, the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition and Context During our testing of six procurement transactions under the SLFRF program, the City was unable to provide documentation supporting procurement policies and procedures were followed for one transaction. Specifically, the City did not provide evidence of procurement history, competitive selection, or justification for the selected vendor related to this expenditure. Invoices were provided to support the expenditure. Cause The City’s internal controls did not ensure that procurement documentation was adequately maintained and available to support all federally funded transactions as required by Uniform Guidance. Effect or Potential Effect Lack of supporting procurement documentation increases the risk of noncompliance with Federal procurement requirements. No questioned costs are reported, as the expenditure was below the questioned cost threshold. Recommendation We recommend that the City strengthen its controls to ensure all required procurement documentation is maintained and readily available for all federally funded transactions. The City should provide training to procurement and program staff on Federal documentation requirements and regularly review procurement files for completeness. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2024-005 Inadequate Contract Retention and Suspension/Debarment Verification (Material Weakness) Federal Agency: Department of Education Pass-through Agency: New Hampshire Department of Education Cluster/Program: Special Education Cluster Assistance Listing Number(s): 84.027, 84.173, 84.027X, 84.173X Passed-through Identification: 20220039, 20221010, 20221035, 20221036, 20221037, 20230209, 20230211, 20230212, 20230214, 20230215, 20230231, 20230232, 2024188, 20240189, 20240190, 20240191, 20240191, 20240199, 20240308 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Federal regulations require that non-federal entities, including school administrative units (SAUs), maintain adequate documentation for all procurement transactions and ensure that vendors are eligible to participate in federal programs. Specifically, 2 CFR 200.318–200.327 outlines standards for procurement, including maintaining documentation that demonstrates compliance with federal requirements, ensuring fair and open competition, and retaining executed contracts and related procurement records. Additionally, 2 CFR 180 and 2 CFR 200.213 require verification that vendors are not suspended, debarred, or otherwise excluded from participation in federal programs prior to entering into a contract. Federal guidance emphasizes that all procurement documentation, including executed contracts, bid evaluations, and vendor eligibility verification, must be retained to provide an audit trail demonstrating compliance and prudent use of federal funds. Maintaining proper documentation and performing required verification steps helps prevent the risk of fraud, waste, or improper payments and ensures transparency and accountability in the use of public resources. Condition: During testing of procurement activities, we noted that two signed and executed contracts could not be located. Furthermore, for all vendors reviewed except one, there was no evidence that the School Administrative Unit (SAU) performed procedures to verify that the vendors were not suspended or debarred. Cause: The SAU did not have a consistent process for retaining executed contracts or for documenting the verification of vendor eligibility under suspension/debarment requirements. Staff were not aware of the federal verification requirements or lacked formal procedures to ensure compliance. Effect: The absence of executed contracts and verification procedures increases the risk of noncompliance with federal procurement regulations. This could potentially result in questioned costs during a federal audit and may expose the SAU to financial or reputational risk if funds were improperly paid to ineligible vendors. Questioned Costs: $679,147 Identification as Repeat Finding: This is not a repeat finding. Recommendation: The SAU should implement a formal procurement policy that ensures all contracts are properly executed, signed, and retained. The policy should also establish a standardized process to verify all vendors against federal suspension and debarment lists prior to awarding contracts, with documentation of all verification steps maintained as part of the procurement record. Additionally, staff should be trained on these procedures to ensure ongoing compliance with federal requirements. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
Criteria: 2024 Compliance Supplement stated that the non-federal entity must meet the general procurement standards in 2 CFR section 200.318(a), which indicated that the recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in §§ 200.317 through 200.327. Condition/Context: As a result of our audit procedures, we noted that Eden's current purchasing (procurement) policy does not include the elements required by the Uniform Guidance. In particular, the policy should address the procurement methods outlined in the procurement claw (i.e. micro-purchases, small purchases, competitive bidding, etc.). Repeat Finding from Prior Year(s): No Cause and Effect: This issue arose from Eden’s limited understanding of the Uniform Guidance’s procurement requirements, which contributed to non-compliance with program requirements. Questioned Cost: None Recommendation: We recommend that management revisit its procurement policies to incorporate the necessary elements required by the Uniform Guidance. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding that the agency did not have policies for Procurement or Suspension and Debarment. The agency intends to adopt a procurement policy and procedures that meets the general procurement standards in 2 CFR section 200.318(a) and the State of California. The agency is also creating policies and procedures to ensure vendors are not suspended or debarred from work on federally funded projects.
FINDING REFERENCE NUMBER 2024-009 FEDERAL PROGRAMS (ALN – 84.027) SPECIAL EDUCATION – GRANTS TO STATES (IDEA, PART B) – SPECIAL EDUCATION CLUSTER (IDEA) (ALN – 84.173) SPECIAL EDUCATION – PRESCHOOL GRANTS (IDEA PRESCHOOL) – SPECIAL EDUCATION CLUSTER (IDEA) (ALN – 84.938A) HURRICANE EDUCATION RECOVERY – INMMEDIATE AID TO RESTART SCHOOL OPERATIONS (RESTART) U.S. DEPARTMENT OF EDUCATION AWARD NUMBERS H027A220003 (07/01/2022 – 09/30/2023); H027A230003 (07/01/2023 – 09/30/2024); H173A220003 (07/01/2022 – 09/30/2023); H173A230003 (07/01/2023 – 09/30/2024); S938A180002 (04/26/2018 – 09/30/2025). COMPLIANCE REQUIREMENT PROCUREMENT AND SUSPENSION AND DEBARMENT TYPE OF FINDING MATERIAL NONCOMPLIANCE AND MATERIAL WEAKNESS CRITERIA 2 CFR Section 200.317, establishes that when conducting procurement transactions under a Federal award, a State or Indian Tribe must follow the same policies and procedures it uses for procurements with non-Federal funds. 2 CFR §200.318(a)(i) establishes that the recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in §§ 200.317 through 200.327. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. STATEMENT OF CONDITION For the ALN 84.938A Restart program, we selected the same sample determined to audit the compliance requirement activities allowed or unallowed/allowable costs/cost principle of forty (40) disbursements from a population of six hundred eighty-three (683) disbursements to suppliers made during the fiscal year 2023-2024. For these forty (40) disbursements, we evaluated the procurement process, and we found the following deficiencies: For nineteen (19) of the cases, the PRDE did not provide either all the necessary documentation or, in some instances, only partial information, preventing a proper assessment of the procurement process for each authorized disbursement. In relation to the IDEA Cluster Program (ALNs 84.027 and 84.173), we requested a list of all procurement procedures performed related to professional services and direct services to participants. No information was provided related to procurement procedures. In addition, we selected a sample of twenty-five (25) transactions for which a quotation process should have been performed, no evidence of quotation process was provided. This represents a scope limitation. QUESTIONED COSTS None. PERSPECTIVE INFORMATION After we requested all the supporting information related to procurement processes, the PRDE was not be able to provide the basic documentation for the procurement performed during the reasonable period of time. STATEMENT OF CAUSE In relation to the IDEA Cluster, the program performs a procurement process related to specific services for which no evidence of the procurement performed was provided. In addition, quotations for some purchases are performed through the Purchase Department of the PRDE. Evidence of the sample selection was not provided for evaluation For the ALN 84.938A, due to the lack of an adequate archiving process for the documentation of the procurement processes, the evidence could not be provided for our evaluation POSSIBLE ASSERTED EFFECT Due to the lack of filing documentation related to the procurements performed program ALN 84.938A Restart, we were unable to properly ascertain if compliance with the procurement process was performed. In relation to the IDEA Cluster, we were unable to ascertain compliance with the procurement compliance requirements. IDENTIFICATION OF REPEAT FINDING This is a repeat finding (Finding Reference Number 2023-007). RECOMMENDATIONS We recommend that the PRDE review its internal control procedures for filings to ensure that all procurement documentation is readily available to any auditor or entity tasked with assessing the procurement process. VIEWS OF RESPONSIBLE OFFICIALS Management agrees with the audit finding. The Puerto Rico Department of Education (PRDE) acknowledges that the requested procurement documentation was not fully available at the time of the auditors’ review. However, management made every effort to gather and reconstruct the information for all the selected transactions, and the complete documentation will be available. Furthermore, the PRDE is taking actions to improve the accessibility and organization of procurement files to ensure that all documentation is readily available for review in a timely manner. Internal controls over document retention and filing procedures are being reinforced to prevent recurrence of this situation. It is important to note that the procurement processes followed by the PRDE comply with the applicable requirements established under the Code of Federal Regulations (2 CFR Part 200 – Uniform Guidance). Management remains committed to strengthening its internal controls, ensuring full compliance with federal and state requirements, and maintaining complete and timely documentation to support all procurement activities. IMPLEMENTATION DATE Current Fiscal Year. RESPONSIBLE PERSON María de los A. Lizardi Valdés Office of Federal Affairs Director Edgar Delgado Serrano Office of Federal Affairs Associate Director
NONCOMPLIANCE WITH PROCUREMENT AND SUSPENSION AND DEBARMENT REQUIREMENTS, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, ASSISTANCE LISTING No. 21.027, DIRECT ALLOCATION, GRANT No. AM-23-0295, YEAR ENDED JUNE 30, 2024 Criteria: Per 2 CFR 200.214, non-Federal entities are subject to the non-procurement, debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The city did not comply with the procurement standards outlined in 2 CFR §200.318-§200.327, which require competitive procurement processes and verification that contractors are not suspended or debarred. Specifically, the city did not verify the eligibility of program recipients/participants/contractors through the System for Award Management (SAM) or equivalent documentation in order to verify that they were not suspended, debarred, or otherwise excluded from participation in the program. Cause: The city does not have procurement policies and procedures in place that allow it to comply with procurement standards outlined in the Uniform Guidance. Effect: Non-compliance with program terms and conditions. Questioned Costs: None Recommendation: Management should develop procedures that will provide reasonable assurance that procurement of goods and services are made in compliance with applicable federal regulations and other procurement requirements specific to a federal award or subaward, and that no subaward, contract, or agreement for purchase of goods or services is made with any suspended or debarred party. Views of responsible officials and planned corrective action: The government agrees with this finding and will adhere to the attached corrective action plan.
Finding 2024-001: Significant Deficiency – Lack of Procurement Policy and Documentation on Sole Source Contracts and Verification of Vendors Federal Grantor: Department of Health and Human Services Condition: The Organization does not have a procurement policy in place that complies with Uniform Guidance. The Organization contracted with a vendor on a sole-source basis and did not document justification for the use of a sole source vendor. In addition, the Organization did not verify that the vendor was not on the list of vendors suspended or debarred from federal contracting before contracting with the vendor. Criteria: Entities are required to have written standards of conduct that cover conflicts of interest and govern the performance of its employees engaged in the selection, award, and administration of contracts (2 CFR section 200.318(c) and 48 CFR sections 52.203-13 and 52.303-16). Entities are required to follow the procurement standards in 2 CFR sections 200.318 through 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320 and noncompetitive procurements. Entities also must comply with 2 CFR Part 1326 that prohibits entities that have been debarred, suspended or voluntarily excluded from participating in Federal procurement. Cause: The Organization does not have a procurement policy that addresses sole source contracting and verifying vendor certification that they are not debarred, suspended, ineligible or voluntarily excluded from Federal procurements. Effect: The Department of Health and Human Services may impose additional conditions on the receipt of a subsequent tranche of future award funds, if any, or take other available remedies as set forth in 2 C.F.C. section 200.339. Recommendation: We recommend the Organization review policies with staff to ensure procurement requirements are followed, and that staff are familiar with federal procurement requirements. Management’s Response: The Organization will develop a procurement policy that complies with federal requirements and will document its justification for vendor selections.
The Ohio County Fiscal Court failed to publicly advertise for bids for all but two of the work site projects for the Emergency Watershed Protection Program project. While the county advertised a pre-bid meeting in the local newspaper for prospective companies to get an opportunity to learn about the project, the actual request for bids should have also been advertised in the local newspaper to ensure fair and cost effective procurement procedures. The total of the amount paid for services not properly advertised was $555,000. A total of $766,100 was spent for this program in the audit year. Per the emergency management staff, this was likely due to a misunderstanding and oversight of what was advertised. They had maintained documentation of the pre-bid meeting being advertised and thought that the actual bid request was advertised as well, but it appears it was not. By not following proper bidding procedures, the public was not made aware of the request for bids for this project and did not have an opportunity to apply to provide services for the project. Only those who attended the pre-bid meeting knew of the bidding procedures and the specifications for the projects. KRS 46.010(2) requires, “each county treasurer, and each county officer who receives or disburses state funds, to keep an accurate account of receipts and disbursements, showing a daily balance of receipts and disbursements.” KRS 46.010(3) requires, “all county officers handling state funds, other than taxes, to make an annual report to the Department for Local Government showing receipts and disbursements, and to make other financial statements as the Department for Local Government requires.” Strong internal controls require management to monitor disbursements to ensure compliance with procurement laws, and to keep good records of all bids and other procurement transactions. KRS 424.260 requires that all contractual services other than professional involving expenditures of greater than $40,000 to be advertised in the local newspaper for bids. In addition, 2 CFR section 200.318 (a) states “The recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in §§ 200.317 through 200.327." Repeat Finding: This is not a repeat finding from the previous year.
Finding #SA2024-004 Compliance with Procurement Requirements Assistance Listing Number: 21.027 Assistance Listing Title: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency: Department of Treasury Pass Through Entity: California State Water Resources Control Board Federal Award Identification Number: A-00216-01 Criteria: Section I, Procurement and Suspension and Debarment, of the May 2024 OMB Compliance Supplement includes the following: In July 2022, Treasury released Final Rule FAQ 13.15, which explains that only a subset of the requirements in Subparts D and E of the Uniform Guidance apply to recipients’ use of award funds under the revenue loss eligible use category. The requirements of 2 CFR sections 200.318 through 200.327 are not included in the list of requirements applicable to such funds. The FAQ 13.15 referenced indicates “In general, these requirements provide that recipients should not deviate from their established practices and policies regarding the incurrence of costs, and that they should expend and account for the funds in accordance with laws and procedures for expending and accounting for the recipient’s own funds.” Condition: We selected seven services and supplies transactions under the revenue loss category to test for allowability under the program and compliance with the City’s procurement policies and noted two vehicle purchases in the amounts of $60,762 and $54,383 were accompanied by sole source purchase documentation, in lieu of formal bidding, but the sole source forms were not signed as approved by the Department Director. Cause: We understand City staff could not locate the authorized forms for the two vehicle purchases. Effect: The City is not in compliance with the procurement requirements of the CSLFRF program. Recommendation: The City must develop procedures to ensure that the procurement files contain documentation to demonstrate compliance with the bidding/quote, contract and sole source requirements, as well as City Council approval requirements, to ensure compliance not only with its own policies, but with the procurement requirements of the CSLFRF grant. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
2024-001 – Procurement, Debarment and Suspension Federal Program Information: US Department of the Treasury, passed through State of Maine Efficiency Maine 21.027 - Coronavirus State Local Fiscal Recovery Funds Criteria: The following CFR(s) apply to this finding: 2 CFR section 200.318 through 200.327. Condition: During audit procedures it was identified that the Town did not check sam.gov to confirm the contractor was not debarred or suspended from receiving federal funds nor did they request a Suspension and Debarment certification from the contractor. It was also identified that the contract was missing several required provisions, including but not limited to, Davis Bacon requirement, Clean Air Act, Federal Water Pollution Act, and the procurement file did not have the cost or price analysis documented. Cause: The Town did not follow their adopted procurement policy. Effect: There is a possibility that the contractor could have been debarred or suspended from working on federally funded projects. Funding may have been erroneously paid to a debarred or suspended contractor resulting in a material misstatement. Identification of Questioned Costs: $290,843 Context: The entire population of 12 months of reimbursements from the fiscal year were examined. Only two disbursements were made during the fiscal year, both were examined. Repeat Finding: This is a not a repeat finding. Recommendation: It is recommended that the Town implement internal control processes and procedures to ensure that federal procurement requirements are understood, including those requirements of recipients, subrecipients, contractors and how to determine who is a recipient, subrecipient and/or contractor. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan.
2024-001 – Procurement, Debarment and Suspension Federal Program Information: US Department of the Treasury, passed through State of Maine Efficiency Maine 21.027 - Coronavirus State Local Fiscal Recovery Funds Criteria: The following CFR(s) apply to this finding: 2 CFR section 200.318 through 200.327. Condition: During audit procedures it was identified that the Town did not check sam.gov to confirm the contractor was not debarred or suspended from receiving federal funds nor did they request a Suspension and Debarment certification from the contractor. It was also identified that the contract was missing several required provisions, including but not limited to, Davis Bacon requirement, Clean Air Act, Federal Water Pollution Act, and the procurement file did not have the cost or price analysis documented. Cause: The Town did not follow their adopted procurement policy. Effect: There is a possibility that the contractor could have been debarred or suspended from working on federally funded projects. Funding may have been erroneously paid to a debarred or suspended contractor resulting in a material misstatement. Identification of Questioned Costs: $290,843 Context: The entire population of 12 months of reimbursements from the fiscal year were examined. Only two disbursements were made during the fiscal year, both were examined. Repeat Finding: This is a not a repeat finding. Recommendation: It is recommended that the Town implement internal control processes and procedures to ensure that federal procurement requirements are understood, including those requirements of recipients, subrecipients, contractors and how to determine who is a recipient, subrecipient and/or contractor. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.318 through 200.327 which describe specific procedures non-Federal entities must follow when making procurement transactions using Federal funds. 2 CFR § 200.318(a) indicates that a non-Federal entity must use its own documented procurement procedures which reflect applicable State and local laws and regulations, provided that such procurements conform to applicable Federal law and standards. 2 CFR § 200.320 indicates the non-Federal entity must use one of the following methods of procurement: (a) procurement by micro-purchases, which are acquisitions of supplies or services for which the aggregate dollar amount does not exceed the micro-purchase threshold; (b) procurement by small purchase procedures, which are relatively simple and informal procurements that do 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; (c) procurement by sealed bids, which are purchases made through publicly solicited bids and result in a firm fixed-price contract (lump-sum or unit price) awarded to the lowest responsive and responsible bidder whose bid conforms to all material terms and conditions of the invitation for bids. This method is appropriate when a complete, adequate, and realistic specification or purchase description is available, two or more responsible bidders are willing and able to compete effectively for the business, and the procurement lends itself to a firm fixed-price contract with the selection of the successful bidder made principally on price; (d) procurement by competitive proposals, which is appropriate when purchases are large and competitive bidding is not appropriate; or (e) procurement by noncompetitive proposals, which are appropriate when the item is available only from a single source, the noncompetitive procurement is expressly authorized in the Federal award, competition is deemed inadequate after solicitation of multiple sources, or the item must be purchased without delay due to a public emergency or exigent circumstances. 2 CFR § 200.318(i) indicates the non-Federal entity must maintain records sufficient to detail the history of procurement. Such records must include, but are not necessarily limited to, the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Maple Heights City School District Board Policy EAG – Administration of Federal Grant Funds requires that all purchases of property and services using federal funds be conducted in accordance with applicable federal, state, and local laws and regulations, the Uniform Guidance, and the District’s written policies and procedures. The policy also requires the District to perform a cost or price analysis for every procurement exceeding the simplified acquisition threshold. In addition, purchasing records must be maintained in sufficient detail to document the history of each procurement, including at a minimum: the rationale for the method of procurement, the selection of contract type, the contractor selected or rejected, the basis for the contract price, and verification that the contractor is not suspended or debarred. Although the District provided verbal justification for the four vendors selected during procurement testing for the Child Nutrition Cluster, it did not maintain written documentation sufficient to detail the history of the procurements, as required by federal regulations and District procurement policy. The procurements tested were below the simplified acquisition threshold; however, for three of the four procurements, required price or rate quotations from an adequate number of qualified sources were not documented. As a result, the District could not demonstrate compliance with federal procurement requirements. Failure to follow Uniform Guidance requirements and district federal procurement policies could lead to reduced future federal funding and questioned costs. The District should adopt and implement procedures to ensure that the history of each procurement is documented, including the rationale for the method of procurement, vendor selection, cost or price analysis, if applicable, and the justification for limiting competition, such as the use of a sole source provider or procurement due to emergency or exigent circumstances.
FINDING 2024-010 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 21611-045-PN01, 22611-045-PN01, 22611-045-ARP, 21619-045-PN01, 22619-045-PN01, 22619-045-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to the Procurement and Suspension and Debarment compliance requirement. Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, the informal procurement method is permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The population for those procurements that fell within the small purchase range consisted of three vendors with a total purchased amount from those vendors of $75,284. The School Corporation did not provide adequate documentation detailing the history of procurement, which must include the reason for the procurement method used, for all three vendors. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. One vendor provided contracted services paid with Special Education Grant funds during the audit period totaling $44,827. Upon inquiry of the School Corporation, it was determined that the School Corporation did not verify that the contractor was not suspended, debarred, or otherwise excluded. INDIANA STATE BOARD OF ACCOUNTS 36 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (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. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (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: . . . (2) Small purchases— (i) Small purchase procedures. 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. . . ." INDIANA STATE BOARD OF ACCOUNTS 37 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Indiana Code 5-22-8-3 states in part: "(a) . . . if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (d) . . . the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to affect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, procurement procedures for goods and services were not adhered to, and vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. INDIANA STATE BOARD OF ACCOUNTS 38 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Condition Upon inquiry of county personnel and a test of four (4) disbursements totaling $452,184, the following instances of noncompliance were noted: • The County failed to document suspension and debarment of vendors for purchases over $25,000. • The County failed to have written standards of conduct that cover conflicts of interest and that govern the performance of its employees engaged in the selection, award, and administration of contract. Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal disbursements are made in accordance with federal compliance requirements. Effect of Condition: This condition resulted in noncompliance with grant requirements and could result in a loss of federal funds. Recommendation: OSAI recommends the County gain an understanding of the grant requirements for this program and implement internal controls to ensure compliance with these grant requirements. Management Response: Chairman of the Board of County Commissioners: These procurement issues originated during the prior County Clerk’s administration, but the current leadership is focused on corrective measures. Together, we are: • developing a SOP to ensure vendor checks for suspension and debarment are conducted on all purchases over $25,000, • establishing written standards of conduct to address conflicts of interest and set clear procurement guidelines, • and enhancing oversight and review to ensure all procurement processes are fully compliant with federal regulations. Our goal is to build a consistent, transparent procurement framework that safeguards both compliance and public trust. County Clerk: I was not the County Clerk in Office at this time. To correct this issue, the County plans to develop a SOP to timely and accurately track and report on the SEFA. The SOP will be reviewed, adopted, and monitored by the Board of County Commissioners. Criteria: Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds (8. Procurement, Suspension & Debarment.) reads as follows: Recipients are responsible for ensuring that any procurement using SLFRF funds, or payments under procurement contracts using such funds, are consistent with the procurement standards set forth in the Uniform Guidance at 2 CFR 200.317 through 2 CFR 200.327, unless stated otherwise by Treasury. As outlined in FAQ 13.15, only a subset of the Uniform Guidance requirements at 2 CFR Part 200 Subpart D (Post Federal Award Requirements) applies to recipients’ use of funds in the revenue loss eligible use category. The procurement standards set forth in the Uniform Guidance at 2 CRF 200.317 through 2 CRF 200.327 are not included in FAQ 13.15’s list of applicable Subpart D requirements that apply to recipients’ use of funds in the revenue loss eligible use category. The Uniform Guidance establishes in 2 CFR 200.319 that all procurement transactions for property or services must be conducted in a manner providing full and open competition, consistent with standards outlined in 2 CFR 200.320, which allows for non-competitive procurements only in certain circumstances. Recipients must have and use documented procurement procedures that are consistent with the standards outlined in 2 CFR 200.317 through 2 CFR 200.320. In addition, the Uniform Guidance at 2 CFR 200.214, 2 CFR Part 180, and Treasury’s implementing regulations at 31 CFR Part 19, prohibit recipients from entering into contracts with suspended or debarred parties. The procurement standards outlined in the Uniform Guidance require an infrastructure for competitive bidding and contractor oversight, including maintaining written standards of conduct. Your organization must ensure adherence to all applicable local, State, and federal procurement laws and regulations. Further, 2 CFR § 200.319 Competition (d) reads as follows: The non-Federal entity must have written procedures for procurement transactions.
2024-008 Federal Agencies: U.S. Department of Agriculture Federal Program Names: The Child Nutrition Cluster: National School Lunch Program Summer Food Service Program Assistance Listing Numbers: 10.555 10.559 Pass-Through Agency: Commonwealth of Pennsylvania, Department of Education Pass-Through Number: 359-46-477-8 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance Criteria: Uniform Guidance requires recipients to submit accurate, complete, and timely financial and performance reports for federal awards (2 CFR 200.327 and 200.328). Program specific reporting instructions for the Child Nutrition Cluster require the FNS 10 and FNS 418 to be filed within 30 days after month end. Condition: As part of the reporting requirements for the CBS Food Program under the National School Lunch Program (NSLP) and Summer Food Service Program (SFSP), management is responsible for submitting the FNS 10 (NSLP) and FNS 418 (SFSP) reports within 30 days after month-end. However, management was unable to provide five (5) monthly NSLP reports and one (1) monthly SFSP report requested for audit testing. Questioned Costs: None Cause: Management did not maintain adequate internal controls to ensure that required monthly program reports were properly completed, retained, and available for audit. This may include weaknesses in recordkeeping processes, staff turnover, or insufficient monitoring of reporting deadlines. Effect: Failure to maintain and provide required federal reports results in noncompliance with federal reporting requirements. Because key source documents were unavailable, auditors were unable to verify the accuracy, completeness, and timeliness of reported program activity for those months. This increases the risk of misreporting or unsupported claims being submitted to the federal government. Recommendation: The Organization should establish and enforce strengthened internal controls over federal reporting to ensure that all required monthly reports (FNS 10 and FNS 418) are: (a) completed accurately, (b) submitted on time, and (c) retained in accordance with federal record retention requirements (2 CFR 200.334). Management should designate responsible personnel and implement a monitoring process to ensure compliance. Views of Responsible Officers and Corrective Action Plan: Please refer to Community Benefit Solutions dba CBS Food Program’s Corrective Action Plan
Finding 2024-005 – Inadequate Procurement Documentation (Material Weakness) Name of Federal Agency: U.S. Environmental Protection Agency Federal Program Name: Nonpoint Source Implementation Grants Assistance Listing Numbers: 66.460 Pass-Through Entity: Oregon Department of Environmental Quality Name of Federal Agency: U.S. Department of Commerce – National Oceanic and Atmospheric Administration Federal Program Name: Pacific Coast Salmon Recovery Program Assistance Listing Numbers: 11.438, 15.015, 15.244 Pass-Through Entity: State of Oregon – Oregon Watershed Enhancement Board (OWEB) Name of Federal Agency: U.S. Department of Agriculture Federal Program Name: National Fish and Wildlife Foundation Assistance Listing Numbers: 10.665 Pass-Through Entity: U.S. Forest Service Name of Federal Agency: U.S. Department of Agriculture Federal Program Name: Natural Resources Conservation Service Assistance Listing Numbers: 10.905 Pass-Through Entity: U.S. Forest Service Name of Federal Agency: U.S. Department of the Interior Federal Program Name: Wildlife, Sport Fish and Restoration Program Assistance Listing Numbers: 15.244 Pass-Through Entity: Bureau of Land Management Name of Federal Agency: U.S. Department of the InteriorFederal Program Name: Secure Rural Schools and community Self-Determination – Watershed and water-quality improvements Assistance Listing Numbers: 15.234 Pass-Through Entity: Bureau of Land Management Criteria: Federal procurement standards require non-Federal entities to maintain records sufficient to detail the history of procurement, including the method of procurement, selection of contract type, contractor selection or rejection, and basis for the contract price. Competitive procurement must follow the entity’s written procedures consistent with 2 CFR §§200.317-200.327, including: Written procedures for procurement (§200.318(a)). Full and open competition requirements (§200.319). Methods of procurement (sealed bids, proposal requirements, and required documentation (§200.320). Contract cost and price justification, (§200.324). Suspension/debarment verification for covered transactions (§200.214; §200.213). Condition: During the audit period, the Entity did not retain sufficient procurement documentation for several contracts funded under the above Assistance Listings. Specifically, files lacked one or more of the following: Evidence of the procurement method used. Price or cost analysis. Suspension/debarment checks for vendors where required. Documentation of competition. Conflict-of-interest attestations. Cause: Partnership for the Umpqua Rivers procurement procedures were not sufficiently detailed or consistently applied to federal purchases. No evidence of procedures or review for procurement or suspension / debarment was provided to auditors. Turnover and limited training on Uniform Guidance procurement standards contributed to the inconsistent file completeness. Effect or Potential Effect: Without complete procurement documentation, the Entity cannot demonstrate compliance with federal procurement requirements, increasing the risk of: Noncompetitive awards or unreasonable prices. Unallowable costs for the award requirements. Potential disallowance or repayment of federal funds. Findings in federal or pass-through monitoring and future audits. Questioned Cost: Yes, $902,496 related to expenditures that had no procurement support or detail. Context: During our audit, it was found that the Partnership for the Umpqua Rivers had experienced complete staff turnover in Financial Management for the year being audited. No current finance employees had worked for the organization during the year being audited. Award files provided to auditors did not contain information related to procurement, suspension or debarment procedures or processes. Repeat of a Prior-Year Finding: No, Prior- year did not require a Single Audit. Recommendation: We recommend that Partnership for the Umpqua Rivers: Update Written Procurement Procedures o Incorporate Uniform Guidance thresholds and methods (§200.320), competition requirements (§200.319), and documentation expectations (history of procurement). o Embed steps for suspension / debarment checks and Appendix II Contract clauses. Standardized Procurement Checklist o Pre-award checklist that verifies: method, competition evidence, cost/price analysis, conflict of interest attestations, SAM exclusion check, and required federal clauses. o Post -award checklist ensuring complete contract file (award memo, bid tab / evaluation, signed agreement, clause verification). Cost/Price Analysis Guidance o Require documented price reasonableness for small purchases, formal cost or price analysis for larger or sole-source awards, per (§200.324). Training & Accountability o Provide targeted training to procurement and program staff on 2 CFR §§200.317- 20.327 and Assistance Listing award conditions. o Implement supervisory pre-award review and periodic file audits. District Response: Partnership for the Umpqua Rivers acknowledges the deficiencies. Corrective Action Plan: ____________ (To be completed by Partnership for the Umpqua Rivers) Planned Implementation Date: _____________ Responsible Person: Partnership for the Umpqua Rivers Finance Manager
Audit Finding 2024-006 – Noncompliance with Prevailing Wage Requirements Identification of the Federal Program: Education Stabilization Funds; Assistance Listing Number 84.425; Year 2024 Criteria: Under prevailing wage requirements applicable to this program (e.g., Davis Bacon Act, 40 U.S.C. 3141–3148, and 2 CFR 200.327 for procurement), contractors and subcontractors performing construction work must: • Pay laborers and mechanics no less than the locally prevailing wage rates as determined by the U.S. Department of Labor (Wage Determinations). • Submit certified payrolls weekly, signed by an authorized representative, in compliance with 29 CFR 5.5(a)(3). • Maintain adequate documentation supporting labor classifications, wage rates, and hours worked. Condition: During our testing of prevailing wage compliance for the outside class structure project, we identified prevailing wage rate clauses were not included in the contract and we could not verify that certified payrolls for compliance with the applicable wage determination were submitted. Context: Documentation was not maintained for prevailing wage support of projects tested. Cause: The District has had vacancies in certain positions that are key parts of the District's control processes which led to the District not maintaining proper documentation. Effect or Potential Effect: Failure to comply with required prevailing wage laws may result in: • Workers being underpaid; • The federal awarding agency requiring back‑wage restitution; • The entity being subject to enforcement actions or questioned costs. Questioned Costs: None Recommendation: We recommend that the entity: • Strengthen internal controls to ensure all contractors adhere to applicable wage determinations. • Require consistent and documented review of weekly certified payrolls. • Obtain restitution for identified underpayments, if applicable. • Provide training to staff overseeing construction and contractor compliance.
U.S. Department of Housing and Urban Development Federal Financial Assistance Listing #14.134 Mortgage Insurance Rental Housing Project Number: 091-11022 HUD Regulatory Agreement Dated July 1, 2016 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Criteria: 2 CRF 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The non-Federal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327 which also requires documentation to be retained to detail the history of procurements. In addition, as outlined in 2 CFR 180, recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contactor registry. Condition: There was one vendor with expenditures in excess of $25,000 and the Project did not verify the vendor against the central contractor registry prior to entering into the transaction or on a periodic basis to ensure that the vendor was not suspended or debarred. Prior to adoption of a procurement policy, management entered into a transaction over the micropurchase threshold with a vendor and documentation was unable to be provided to support procurement compliance for the vendor. Cause: The Project adopted a written procurement policy which conforms to Uniform Guidance during May 2023 and therefore, the Project did not have a policy in place to follow from January through May. Management overlooked the requirement to verify the vendor against the central contractor registry for a vendor. Effect: Inadequate controls over this area of compliance result in a reasonable possibility that the Project would not have the required documentation in place and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: $23,335 Context/Sampling: A nonstatistical sample of 4 of 8 transactions applicable to procurement requirements were selected for testing, which accounted for $95,590 of $199,971 of transactions. In addition, there was one vendor in which suspension and debarment requirements were applicable and the vendor was tested. Repeat Finding from Prior Year: Yes Recommendation: Management implemented formal procedures over procurement during May 2023 and we recommend management continue following those formal procedures. In addition, we recommend management implement formal procedures over suspension and debarment and retain sufficient documentation to support the process was followed. Views of Responsible Officials: Management agrees with the finding and recommendation.
Assistance Listing Number 66.468 Drinking Water State Revolving Fund United States Environmental Protection Agency North Dakota Public Finance Authority Procurement Suspension & Debarment 2 CFR Part 200.318 Criteria 2 CFR Part 200.318 states that a non-Federal entity must have and use documented procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR part 200.317 through 200.327. Condition District does not have a written procurement policy in place. Cause The District has not approved a written procurement policy. Effect Non-compliance with Procurement Suspension & Debarment compliance requirements. Questioned Costs Not Applicable Repeat Finding See 2022-005. Recommendation We recommend for the board of the District to create and implement a procurement policy that adheres to state and local regulations as well as 2 CFR Part 200.317 through 200.327. Views of Responsible Officials and Planned Corrective Actions The District will create and approve a procurement policy that adheres to state and local regulations as well as 2 CFR Part 200.317 through 200.327.
Finding 2023-002: Procurement and Suspension and Debarment Identification of federal program: Program Titles: Agriculture Research Basic and Applied Research & Community Economic Adjustment Assistance for Compatible Use and Joint Land Use Studies Assistance Listing Numbers: 10.001 & 12.610 Award Identification: CA 59-8082-0-001 & W9124J2120002 Federal Agencies: U.S. Department of Agriculture, Agriculture Research Service & U.S. Department of Defense, Office of Local Defense Community Cooperation Criteria or Specific Requirement: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: While the Fund adopted an updated procurement policy during 2023, testing of the Fund’s controls on compliance over procurement and suspension and debarment identified transactions under the old policy. The Fund did not have a procurement policy in place for the full year that is in compliance with prescribed standards in the Uniform Guidance; therefore, prior to the adoption of the updated procurement policy, suspension and debarment verifications were not performed prior to entering a covered transaction. Cause: While the Fund adopted an updated procurement policy, including policies over suspension and debarment that fully conforms to Uniform Guidance, the policy was adopted during 2023. Effect: The Fund was not in compliance with the procurement policy requirements of Uniform Guidance, specifically around suspension and debarment for the entirety of 2023. Questioned Costs: None Context: The Fund adopted an updated procurement policy in 2023, which fully complies with Uniform Guidance requirements addressed in Chapter 2 Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. As the policy was not in place for the full year, we are unable to adequately test compliance prior to the adoption of the new policy. Repeat finding: Yes, Finding 2022-002 Recommendation: We acknowledge the Fund adopted and documented procurement procedures, which conform to the procurement standards identified in 2 CFR section §§ 200.317 through 200.327, and also addressed suspension and debarment during 2023. We recommend management continue training to ensure all applicable personnel are familiar with the revised policy. Views of responsible individuals: Management concurs with and will implement the recommendation. See corrective action plan.
Finding 2023-002: Procurement and Suspension and Debarment Identification of federal program: Program Titles: Agriculture Research Basic and Applied Research & Community Economic Adjustment Assistance for Compatible Use and Joint Land Use Studies Assistance Listing Numbers: 10.001 & 12.610 Award Identification: CA 59-8082-0-001 & W9124J2120002 Federal Agencies: U.S. Department of Agriculture, Agriculture Research Service & U.S. Department of Defense, Office of Local Defense Community Cooperation Criteria or Specific Requirement: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: While the Fund adopted an updated procurement policy during 2023, testing of the Fund’s controls on compliance over procurement and suspension and debarment identified transactions under the old policy. The Fund did not have a procurement policy in place for the full year that is in compliance with prescribed standards in the Uniform Guidance; therefore, prior to the adoption of the updated procurement policy, suspension and debarment verifications were not performed prior to entering a covered transaction. Cause: While the Fund adopted an updated procurement policy, including policies over suspension and debarment that fully conforms to Uniform Guidance, the policy was adopted during 2023. Effect: The Fund was not in compliance with the procurement policy requirements of Uniform Guidance, specifically around suspension and debarment for the entirety of 2023. Questioned Costs: None Context: The Fund adopted an updated procurement policy in 2023, which fully complies with Uniform Guidance requirements addressed in Chapter 2 Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. As the policy was not in place for the full year, we are unable to adequately test compliance prior to the adoption of the new policy. Repeat finding: Yes, Finding 2022-002 Recommendation: We acknowledge the Fund adopted and documented procurement procedures, which conform to the procurement standards identified in 2 CFR section §§ 200.317 through 200.327, and also addressed suspension and debarment during 2023. We recommend management continue training to ensure all applicable personnel are familiar with the revised policy. Views of responsible individuals: Management concurs with and will implement the recommendation. See corrective action plan.
Department of Transportation Federal Financial Assistance Listing 20.106; Awards AIP3‐46‐0050‐54, AIP3‐46‐0050‐59, AIP3‐46‐0050‐60, and AIP3‐46‐0050‐62. COVID‐19 Airport Improvement Program Reporting Significant Deficiency in Internal Control over Compliance Criteria ‐ 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls over the federal awards that provide assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with the program requirements. Condition ‐ The SF‐425 annual report dated September 30, 2023, for award AIP3‐46‐0050‐54 underreported the federal share of expenditures by $80,133, while the FAA Form 5100‐127 annual report dated December 31, 2022, for all awards underreported the externally restricted assets by $397,646. Cause ‐ The Authority does not have an internal control structure designed to ensure amounts reported on SF‐425 and FAA Form 5100‐127 reports are adequately reviewed and agree to underlying accounting records. Effect ‐ Lack of compliance with designed internal controls over reporting could result in the Authority reporting incorrect or incomplete information. Questioned Costs ‐ None reported. Context/Sampling ‐ A nonstatistical sample of 10 reports out of 31 reports. Repeat Finding from Prior Year – Yes, prior year finding 2022‐002 Recommendation ‐ Management should determine and formalize reporting responsibilities between the Airport and the State and establish review processes to ensure that amounts included in SF‐425 and FAA Form 5100‐127 reports agree with the underlying accounting records. Views of Responsible Officials ‐ Management agrees with the finding.
Department of Transportation Federal Financial Assistance Listing 20.106; Awards AIP3‐46‐0050‐54, AIP3‐46‐0050‐59, AIP3‐46‐0050‐60, and AIP3‐46‐0050‐62. COVID‐19 Airport Improvement Program Reporting Significant Deficiency in Internal Control over Compliance Criteria ‐ 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls over the federal awards that provide assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with the program requirements. Condition ‐ The SF‐425 annual report dated September 30, 2023, for award AIP3‐46‐0050‐54 underreported the federal share of expenditures by $80,133, while the FAA Form 5100‐127 annual report dated December 31, 2022, for all awards underreported the externally restricted assets by $397,646. Cause ‐ The Authority does not have an internal control structure designed to ensure amounts reported on SF‐425 and FAA Form 5100‐127 reports are adequately reviewed and agree to underlying accounting records. Effect ‐ Lack of compliance with designed internal controls over reporting could result in the Authority reporting incorrect or incomplete information. Questioned Costs ‐ None reported. Context/Sampling ‐ A nonstatistical sample of 10 reports out of 31 reports. Repeat Finding from Prior Year – Yes, prior year finding 2022‐002 Recommendation ‐ Management should determine and formalize reporting responsibilities between the Airport and the State and establish review processes to ensure that amounts included in SF‐425 and FAA Form 5100‐127 reports agree with the underlying accounting records. Views of Responsible Officials ‐ Management agrees with the finding.
Department of Transportation Federal Financial Assistance Listing 20.106; Awards AIP3‐46‐0050‐54, AIP3‐46‐0050‐59, AIP3‐46‐0050‐60, and AIP3‐46‐0050‐62. COVID‐19 Airport Improvement Program Reporting Significant Deficiency in Internal Control over Compliance Criteria ‐ 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls over the federal awards that provide assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with the program requirements. Condition ‐ The SF‐425 annual report dated September 30, 2023, for award AIP3‐46‐0050‐54 underreported the federal share of expenditures by $80,133, while the FAA Form 5100‐127 annual report dated December 31, 2022, for all awards underreported the externally restricted assets by $397,646. Cause ‐ The Authority does not have an internal control structure designed to ensure amounts reported on SF‐425 and FAA Form 5100‐127 reports are adequately reviewed and agree to underlying accounting records. Effect ‐ Lack of compliance with designed internal controls over reporting could result in the Authority reporting incorrect or incomplete information. Questioned Costs ‐ None reported. Context/Sampling ‐ A nonstatistical sample of 10 reports out of 31 reports. Repeat Finding from Prior Year – Yes, prior year finding 2022‐002 Recommendation ‐ Management should determine and formalize reporting responsibilities between the Airport and the State and establish review processes to ensure that amounts included in SF‐425 and FAA Form 5100‐127 reports agree with the underlying accounting records. Views of Responsible Officials ‐ Management agrees with the finding.
Department of Transportation Federal Financial Assistance Listing 20.106; Awards AIP3‐46‐0050‐54, AIP3‐46‐0050‐59, AIP3‐46‐0050‐60, and AIP3‐46‐0050‐62. COVID‐19 Airport Improvement Program Reporting Significant Deficiency in Internal Control over Compliance Criteria ‐ 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls over the federal awards that provide assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with the program requirements. Condition ‐ The SF‐425 annual report dated September 30, 2023, for award AIP3‐46‐0050‐54 underreported the federal share of expenditures by $80,133, while the FAA Form 5100‐127 annual report dated December 31, 2022, for all awards underreported the externally restricted assets by $397,646. Cause ‐ The Authority does not have an internal control structure designed to ensure amounts reported on SF‐425 and FAA Form 5100‐127 reports are adequately reviewed and agree to underlying accounting records. Effect ‐ Lack of compliance with designed internal controls over reporting could result in the Authority reporting incorrect or incomplete information. Questioned Costs ‐ None reported. Context/Sampling ‐ A nonstatistical sample of 10 reports out of 31 reports. Repeat Finding from Prior Year – Yes, prior year finding 2022‐002 Recommendation ‐ Management should determine and formalize reporting responsibilities between the Airport and the State and establish review processes to ensure that amounts included in SF‐425 and FAA Form 5100‐127 reports agree with the underlying accounting records. Views of Responsible Officials ‐ Management agrees with the finding.
Finding # 2023-002 Type: Immaterial noncompliance over procurement Assistance Listing: 10.937 Partnerships for Climate-Smart Commodities Criteria/Requirement The Organization’s procurement policies should incorporate the provisions of the procurement standards set out at 2 CFR sections 200.318 through 200.327. Cause: The Organization’s fiscal policies and procedures do not meet the required federal standards for procurement. Effect: Executed contracts using federal funds may be in violation of federal guidelines. Questioned Costs: None. Recommendation: The Organization's procurement policy must have documented procurement procedures, consistent with state, local, and tribal laws and regulations for the acquisition of property or services required under a federal award or subaward. The Organization should maintain records sufficient to detail the history of procurement. Management’s Response: The Organization agrees with the auditor’s recommendation. At the time of this audit’s issuance, the Organization has updated its procurement policies and procedures to be consistent with federal requirements.