Criteria: The Corporation must maintain and adhere to documented procurement procedures that must conform to the procurement standards in 2 CFR Sections 200.317 through 200.327. These sections include policies and procedures related to competition, informal and formal procurement methods and noncompetitive procurement. Condition: We noted that there was a lack of evidence that policies and procedures were applied as required under the noted 2 CFR Sections in “Criteria”. Cause: The Corporation did not maintain formal documentation or evidence to support that a competitive price analysis for vendors or that suspension and debarment verifications were performed for vendors, as required by the general procurement standards of the Uniform Guidance. Effect or Potential Effect: We were unable to determine whether charges relating to vendor services or goods charged to the Federal programs are in accordance with 2 CFR Sections 200.317 through 200.327 or 200.214. Questioned costs: None Context: The Corporation was unable to provide evidence of procurement, suspension or debarment verification performed for walkthrough purposes or any samples that would be selected. Additionally, per management, no written documentation can be provided for any sole source procurements. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2022-010 in the 2022 report. Recommendation: We recommend the Corporation establish formal internal controls, and documentation of their performance, relating procurement, required price analysis of vendors, and suspension and debarment verifications. View of Responsible Officials: Due to turnover of several key financial executives and personnel and lack of formal documentation of current policies and procedures, the Corporation was unable to provide evidence of procurement, suspension or debarment verification performed as of December 31, 2023.
Agency U.S. Department of Transportation, Federal Motor Carrier Safety Administration ALN 20.232 Commercial Driver’s License Program Implementation Federal Award Identification Number 69A3601940354CDL0NV, 69A3602040472CDL0NV 69A3602140719CDL0NV 69A3602240864CDL0NV Criteria According to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 200.327 and 200.328, recipients of federal awards are required to submit performance and financial reports by the due dates specified in the terms and conditions of the federal award. Condition and Context We sampled and tested eight reports and four of the eight selected reports were not submitted within the specified reporting dates. Cause The College failed to maintain a system of controls and procedures to ensure that the various reports were submitted within the required reporting timeframes. Effect Failure to submit required reports within the required dates may result in The College being noncompliant with 2 CFR 200.327 & 328. Repeat Finding No Recommendation We recommend The College review its controls and procedures to ensure that all its reporting requirements are being adhered to and the reports are being submitted with the specified filing dates.
Criteria An entity must have and use documented procurement policies consistent with Federal, State, and local laws, regulations, and standards for the acquisition of property or services required under a Federal award or subaward. The procedures must conform to the procurement standards identified in CFR 200.317 through 200.327. Condition The Program made two large purchases using grant funds exceeding the micro-purchase threshold without obtaining price or rate quotations from an adequate number of qualified sources. Cause The Program was not fully educated on procurement policies when it came to grant funds, so they were not aware that bids or price comparisons were necessary for the purchases. Effect Failure to follow appropriate procurement procedures could result in excess procurement costs being disallowed or subject the entity to possible claims. It was determined that the items procured were reasonable in cost with other vendors. Recommendation We recommend management adhere to the Federal, State, and local regulations for all procurements using Federally sourced funds. Management's Response Management agrees with our recommendation and finding and will work to adhere to all applicable procurement policies.
NATIONAL SCIENCE FOUNDATION Program Information Assistance Listing # 47.076 STEM Education Grant No. (FAIN) 2005484 Grant Period - September 1, 2020 – August 31, 2023 Grant No. (FAIN) 2005942 Grant Period – August 15, 2020 – July 31, 2024 2023-002 Policies and Procedures Material Weakness Criteria: The Code of Federal Regulations (CFR) Section 200.318 - 200.327 require written policies concerning methods of procurement for goods and services. Condition: The Foundation did not have a written procurement policy that included all of the required elements during 2023. Also, there were no controls in place to detect or prevent this policy from not being prepared. Cause: This is the first year that the Foundation was required to have a Single audit and as such is still in the process of developing and adopting specific policies and procedures to ensure its internal practices are in alignment with the Uniform Guidance. Effect: The Foundation is not in compliance with Section 200.318 - 200.327 of the Code of Federal Regulations. Auditor’s Recommendation: We recommend that the Foundation adopt a formal written procurement policy in the format and with the elements required by 2 CFR Sections 200.318 to 200.327. Views of Responsible Officials and Planned Corrective Actions: The Foundation’s management team agrees with this finding and remains fully committed to both developing and adopting specific procurement policies for federal expenditures which will better ensure its internal practices are in alignment with the Uniform Guidance.
U.S. Department of Treasury COVID 19 - Coronavirus State and Local Fiscal Recovery Funds - 21.027 Criteria or Specific Requirement: Procurement and Significant Deficiency In accordance with 2 CFR 200.318, recipients and subrecipients must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including acquisition of property and services. These documented procurement procedures must be consistent with State, local and tribal laws and regulations and the standards identified in 2 CFR 200.317 through 2 CFR 200.327. Condition: During our test work over the Coronavirus State and Local Fiscal Recovery grant, we noted the Unified Government did not perform procurement procedures on one of its vendor contracts. Questioned Costs - None noted. Context: For 21.027, there were 29 vendors receiving a total of $1,789,214 subject to procurement requirements. Of those 29, a sample of eight vendors receiving a total of $470,106 were selected for testing. One of the eight vendors selected for testing did not undergo the Unified Government's formal procurement procedures. However, the vendor did undergo proper suspension and debarment checks and no issues were identified during this check. The sample was not intended to be, and was not, a statistically valid sample. Identification of Prior Year Finding: N/A Effect: Federal funds could be paid to entities outside of the Unified Government's procurement policy. Cause: The vendor identified was granted a non-competitive procurement under national emergency conditions due to the effects of COVID-19. However, the vendor was utilized again after the national emergency period and the Unified Government's procurement policy should have been followed at this time, but was not. Recommendation: We recommend that the Unified Government communicate to all departments that purchases using federal funds follow the procurement policy procedures prior to purchase and the procurement department provide training on the requirements to properly document that the procedures are completed. View of Responsible Official and Planned Corrective Actions: Departments have been informed of the procurement requirements and the procurement policy will be adhered to on a go forward basis.
Finding 2023-007 Failure to Create and Implement a Suitable Procurement Policy Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Criteria: Uniform Guidance requires organizations that receive federal funds to establish and maintain effective internal controls, including a documented procurement policy. A procurement policy outlines the procedures, thresholds, and guidelines for acquiring goods and services, ensuring transparency, competition, and cost-effectiveness while preventing fraud, waste, and abuse. Procurement policies must include relevant elements detailed in 2 CFR §200.317 - §200.327. The Organization is required to implement the procurement policy in its procedures and to develop internal controls to ensure its effectiveness. Cause: The Organization had not recognized the significance of a well-structured procurement policy in safeguarding federal funds and ensuring compliance. This lack of awareness led to inadequate attention being given to the establishment of such a policy. Once created, leadership failed to identify an effective implementation strategy to ensure compliance. These issues were exacerbated by a failure to maintain appropriate documentation and to have sufficient internal controls over the procurement process. Effect: The absence of a documented procurement policy exposes the Organization to several risks and potential consequences. Without established guidelines, there is a higher likelihood of inconsistent procurement practices, leading to inefficiencies and increased costs. The absence of a defined procurement process could result in a lack of transparency and accountability in vendor selection and contract award decisions. Failure to have necessary safeguards in standards of conduct over employee actions could result in unreported conflicts of interest or inappropriate actions taking in award decisions. Questioned Costs: Known questioned costs of $24,645 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review their procurement policy in line with Uniform Guidance standards and update the policy to include the missing elements. The Organization should also identify an effective implementation plan to ensure that the procedures over procurement include the elements detailed in its procurement policy. Finally, it is recommended that the Organization implement an effective system of internal controls to ensure that the Organization's procurements are compliant with federal requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations and conduct mandatory training for all staff involved in the procurement process.
Finding 2023-007 Failure to Create and Implement a Suitable Procurement Policy Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Criteria: Uniform Guidance requires organizations that receive federal funds to establish and maintain effective internal controls, including a documented procurement policy. A procurement policy outlines the procedures, thresholds, and guidelines for acquiring goods and services, ensuring transparency, competition, and cost-effectiveness while preventing fraud, waste, and abuse. Procurement policies must include relevant elements detailed in 2 CFR §200.317 - §200.327. The Organization is required to implement the procurement policy in its procedures and to develop internal controls to ensure its effectiveness. Cause: The Organization had not recognized the significance of a well-structured procurement policy in safeguarding federal funds and ensuring compliance. This lack of awareness led to inadequate attention being given to the establishment of such a policy. Once created, leadership failed to identify an effective implementation strategy to ensure compliance. These issues were exacerbated by a failure to maintain appropriate documentation and to have sufficient internal controls over the procurement process. Effect: The absence of a documented procurement policy exposes the Organization to several risks and potential consequences. Without established guidelines, there is a higher likelihood of inconsistent procurement practices, leading to inefficiencies and increased costs. The absence of a defined procurement process could result in a lack of transparency and accountability in vendor selection and contract award decisions. Failure to have necessary safeguards in standards of conduct over employee actions could result in unreported conflicts of interest or inappropriate actions taking in award decisions. Questioned Costs: Known questioned costs of $24,645 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review their procurement policy in line with Uniform Guidance standards and update the policy to include the missing elements. The Organization should also identify an effective implementation plan to ensure that the procedures over procurement include the elements detailed in its procurement policy. Finally, it is recommended that the Organization implement an effective system of internal controls to ensure that the Organization's procurements are compliant with federal requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations and conduct mandatory training for all staff involved in the procurement process.
Finding 2023-007 Failure to Create and Implement a Suitable Procurement Policy Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Criteria: Uniform Guidance requires organizations that receive federal funds to establish and maintain effective internal controls, including a documented procurement policy. A procurement policy outlines the procedures, thresholds, and guidelines for acquiring goods and services, ensuring transparency, competition, and cost-effectiveness while preventing fraud, waste, and abuse. Procurement policies must include relevant elements detailed in 2 CFR §200.317 - §200.327. The Organization is required to implement the procurement policy in its procedures and to develop internal controls to ensure its effectiveness. Cause: The Organization had not recognized the significance of a well-structured procurement policy in safeguarding federal funds and ensuring compliance. This lack of awareness led to inadequate attention being given to the establishment of such a policy. Once created, leadership failed to identify an effective implementation strategy to ensure compliance. These issues were exacerbated by a failure to maintain appropriate documentation and to have sufficient internal controls over the procurement process. Effect: The absence of a documented procurement policy exposes the Organization to several risks and potential consequences. Without established guidelines, there is a higher likelihood of inconsistent procurement practices, leading to inefficiencies and increased costs. The absence of a defined procurement process could result in a lack of transparency and accountability in vendor selection and contract award decisions. Failure to have necessary safeguards in standards of conduct over employee actions could result in unreported conflicts of interest or inappropriate actions taking in award decisions. Questioned Costs: Known questioned costs of $24,645 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review their procurement policy in line with Uniform Guidance standards and update the policy to include the missing elements. The Organization should also identify an effective implementation plan to ensure that the procedures over procurement include the elements detailed in its procurement policy. Finally, it is recommended that the Organization implement an effective system of internal controls to ensure that the Organization's procurements are compliant with federal requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations and conduct mandatory training for all staff involved in the procurement process.
Finding 2023-007 Failure to Create and Implement a Suitable Procurement Policy Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Criteria: Uniform Guidance requires organizations that receive federal funds to establish and maintain effective internal controls, including a documented procurement policy. A procurement policy outlines the procedures, thresholds, and guidelines for acquiring goods and services, ensuring transparency, competition, and cost-effectiveness while preventing fraud, waste, and abuse. Procurement policies must include relevant elements detailed in 2 CFR §200.317 - §200.327. The Organization is required to implement the procurement policy in its procedures and to develop internal controls to ensure its effectiveness. Cause: The Organization had not recognized the significance of a well-structured procurement policy in safeguarding federal funds and ensuring compliance. This lack of awareness led to inadequate attention being given to the establishment of such a policy. Once created, leadership failed to identify an effective implementation strategy to ensure compliance. These issues were exacerbated by a failure to maintain appropriate documentation and to have sufficient internal controls over the procurement process. Effect: The absence of a documented procurement policy exposes the Organization to several risks and potential consequences. Without established guidelines, there is a higher likelihood of inconsistent procurement practices, leading to inefficiencies and increased costs. The absence of a defined procurement process could result in a lack of transparency and accountability in vendor selection and contract award decisions. Failure to have necessary safeguards in standards of conduct over employee actions could result in unreported conflicts of interest or inappropriate actions taking in award decisions. Questioned Costs: Known questioned costs of $24,645 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review their procurement policy in line with Uniform Guidance standards and update the policy to include the missing elements. The Organization should also identify an effective implementation plan to ensure that the procedures over procurement include the elements detailed in its procurement policy. Finally, it is recommended that the Organization implement an effective system of internal controls to ensure that the Organization's procurements are compliant with federal requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations and conduct mandatory training for all staff involved in the procurement process.
Finding 2023-007 Failure to Create and Implement a Suitable Procurement Policy Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition and Context: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Criteria: Uniform Guidance requires organizations that receive federal funds to establish and maintain effective internal controls, including a documented procurement policy. A procurement policy outlines the procedures, thresholds, and guidelines for acquiring goods and services, ensuring transparency, competition, and cost-effectiveness while preventing fraud, waste, and abuse. Procurement policies must include relevant elements detailed in 2 CFR §200.317 - §200.327. The Organization is required to implement the procurement policy in its procedures and to develop internal controls to ensure its effectiveness. Cause: The Organization had not recognized the significance of a well-structured procurement policy in safeguarding federal funds and ensuring compliance. This lack of awareness led to inadequate attention being given to the establishment of such a policy. Once created, leadership failed to identify an effective implementation strategy to ensure compliance. These issues were exacerbated by a failure to maintain appropriate documentation and to have sufficient internal controls over the procurement process. Effect: The absence of a documented procurement policy exposes the Organization to several risks and potential consequences. Without established guidelines, there is a higher likelihood of inconsistent procurement practices, leading to inefficiencies and increased costs. The absence of a defined procurement process could result in a lack of transparency and accountability in vendor selection and contract award decisions. Failure to have necessary safeguards in standards of conduct over employee actions could result in unreported conflicts of interest or inappropriate actions taking in award decisions. Questioned Costs: Known questioned costs of $24,645 were identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review their procurement policy in line with Uniform Guidance standards and update the policy to include the missing elements. The Organization should also identify an effective implementation plan to ensure that the procedures over procurement include the elements detailed in its procurement policy. Finally, it is recommended that the Organization implement an effective system of internal controls to ensure that the Organization's procurements are compliant with federal requirements. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations and conduct mandatory training for all staff involved in the procurement process.
Finding 2023-002: Procurement US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the Axon contract totaling $651,922 for the year ended December 31, 2023 followed formal procurement procedures. The Axon contract exceeds the Uniform Guidance formal procurement threshold but was done through cooperative purchasing. In addition, in accordance with the Uniform Guidance, a purchase price from a cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the value of the procurement transaction. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. The City relied upon vendors preapproved by the Commonwealth of Pennsylvania’s General Services Administration (GSA). These vendors were considered preapproved based on the Commonwealth’s own use of cooperative purchasing programs. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat finding: No Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows all Uniform Guidance procurement standards, especially regarding cooperating purchasing programs. View of Responsible Officials: Management agrees. See Corrective Action Plan.
Finding 2023-002: Procurement US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the Axon contract totaling $651,922 for the year ended December 31, 2023 followed formal procurement procedures. The Axon contract exceeds the Uniform Guidance formal procurement threshold but was done through cooperative purchasing. In addition, in accordance with the Uniform Guidance, a purchase price from a cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the value of the procurement transaction. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. The City relied upon vendors preapproved by the Commonwealth of Pennsylvania’s General Services Administration (GSA). These vendors were considered preapproved based on the Commonwealth’s own use of cooperative purchasing programs. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat finding: No Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows all Uniform Guidance procurement standards, especially regarding cooperating purchasing programs. View of Responsible Officials: Management agrees. See Corrective Action Plan.
Finding 2023-002: Procurement US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the Axon contract totaling $651,922 for the year ended December 31, 2023 followed formal procurement procedures. The Axon contract exceeds the Uniform Guidance formal procurement threshold but was done through cooperative purchasing. In addition, in accordance with the Uniform Guidance, a purchase price from a cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the value of the procurement transaction. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. The City relied upon vendors preapproved by the Commonwealth of Pennsylvania’s General Services Administration (GSA). These vendors were considered preapproved based on the Commonwealth’s own use of cooperative purchasing programs. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat finding: No Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows all Uniform Guidance procurement standards, especially regarding cooperating purchasing programs. View of Responsible Officials: Management agrees. See Corrective Action Plan.
Finding 2023-002: Procurement US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the Axon contract totaling $651,922 for the year ended December 31, 2023 followed formal procurement procedures. The Axon contract exceeds the Uniform Guidance formal procurement threshold but was done through cooperative purchasing. In addition, in accordance with the Uniform Guidance, a purchase price from a cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the value of the procurement transaction. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. The City relied upon vendors preapproved by the Commonwealth of Pennsylvania’s General Services Administration (GSA). These vendors were considered preapproved based on the Commonwealth’s own use of cooperative purchasing programs. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat finding: No Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows all Uniform Guidance procurement standards, especially regarding cooperating purchasing programs. View of Responsible Officials: Management agrees. See Corrective Action Plan.
Finding 2023-002: Procurement US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the Axon contract totaling $651,922 for the year ended December 31, 2023 followed formal procurement procedures. The Axon contract exceeds the Uniform Guidance formal procurement threshold but was done through cooperative purchasing. In addition, in accordance with the Uniform Guidance, a purchase price from a cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the value of the procurement transaction. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. The City relied upon vendors preapproved by the Commonwealth of Pennsylvania’s General Services Administration (GSA). These vendors were considered preapproved based on the Commonwealth’s own use of cooperative purchasing programs. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat finding: No Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows all Uniform Guidance procurement standards, especially regarding cooperating purchasing programs. View of Responsible Officials: Management agrees. See Corrective Action Plan.
Finding 2023-005 – Procurement Repeat Finding – See Finding 2022-007 US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the water main replacement project totaling $3,104,970 for the year ended December 31, 2023 followed formal procurement procedures. The water main replacement contract exceeds the Uniform Guidance formal procurement methods. In addition, in accordance with the Uniform Guidance, a purchase price from the Commonwealth of Pennsylvania COSTARS cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the dollar amount of the purchase. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat Finding: Yes Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows Uniform Guidance procurement standards. View of Responsible Official: The City agrees. See the corrective action plan.
Finding 2023-005 – Procurement Repeat Finding – See Finding 2022-007 US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the water main replacement project totaling $3,104,970 for the year ended December 31, 2023 followed formal procurement procedures. The water main replacement contract exceeds the Uniform Guidance formal procurement methods. In addition, in accordance with the Uniform Guidance, a purchase price from the Commonwealth of Pennsylvania COSTARS cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the dollar amount of the purchase. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat Finding: Yes Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows Uniform Guidance procurement standards. View of Responsible Official: The City agrees. See the corrective action plan.
Finding 2023-005 – Procurement Repeat Finding – See Finding 2022-007 US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the water main replacement project totaling $3,104,970 for the year ended December 31, 2023 followed formal procurement procedures. The water main replacement contract exceeds the Uniform Guidance formal procurement methods. In addition, in accordance with the Uniform Guidance, a purchase price from the Commonwealth of Pennsylvania COSTARS cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the dollar amount of the purchase. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat Finding: Yes Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows Uniform Guidance procurement standards. View of Responsible Official: The City agrees. See the corrective action plan.
Finding 2023-005 – Procurement Repeat Finding – See Finding 2022-007 US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the water main replacement project totaling $3,104,970 for the year ended December 31, 2023 followed formal procurement procedures. The water main replacement contract exceeds the Uniform Guidance formal procurement methods. In addition, in accordance with the Uniform Guidance, a purchase price from the Commonwealth of Pennsylvania COSTARS cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the dollar amount of the purchase. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat Finding: Yes Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows Uniform Guidance procurement standards. View of Responsible Official: The City agrees. See the corrective action plan.
Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 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 conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 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 conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 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 conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 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 conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 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 conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 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 conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 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 conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 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 conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2023-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the District is the procurement standards under 2 CFR sections 200.318 through 200.327. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the District does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The District has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the District’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • General procurement standards, including oversight of contractors, conflicts of interest, and avoidance of duplicative items • Competition • Bonding requirements • Contract provisions • Federal agency or pass-through entity review • Subrecipient and contractor determinations • Retention requirements for records • Domestic preferences • Procurement of recovered materials Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the District’s procurement policy appropriately. This would include adding any missing components to the District’s current procurement policy and updating definitions of types of procurement (i.e., micro-purchases, small purchases, and small acquisition threshold), to match the language used in the Uniform Guidance procurement standards. Questioned Costs: None
2023-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the District is the procurement standards under 2 CFR sections 200.318 through 200.327. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the District does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The District has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the District’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • General procurement standards, including oversight of contractors, conflicts of interest, and avoidance of duplicative items • Competition • Bonding requirements • Contract provisions • Federal agency or pass-through entity review • Subrecipient and contractor determinations • Retention requirements for records • Domestic preferences • Procurement of recovered materials Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the District’s procurement policy appropriately. This would include adding any missing components to the District’s current procurement policy and updating definitions of types of procurement (i.e., micro-purchases, small purchases, and small acquisition threshold), to match the language used in the Uniform Guidance procurement standards. Questioned Costs: None
2023-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the District is the procurement standards under 2 CFR sections 200.318 through 200.327. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the District does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The District has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the District’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • General procurement standards, including oversight of contractors, conflicts of interest, and avoidance of duplicative items • Competition • Bonding requirements • Contract provisions • Federal agency or pass-through entity review • Subrecipient and contractor determinations • Retention requirements for records • Domestic preferences • Procurement of recovered materials Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the District’s procurement policy appropriately. This would include adding any missing components to the District’s current procurement policy and updating definitions of types of procurement (i.e., micro-purchases, small purchases, and small acquisition threshold), to match the language used in the Uniform Guidance procurement standards. Questioned Costs: None
2023-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the District is the procurement standards under 2 CFR sections 200.318 through 200.327. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the District does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The District has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the District’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • General procurement standards, including oversight of contractors, conflicts of interest, and avoidance of duplicative items • Competition • Bonding requirements • Contract provisions • Federal agency or pass-through entity review • Subrecipient and contractor determinations • Retention requirements for records • Domestic preferences • Procurement of recovered materials Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the District’s procurement policy appropriately. This would include adding any missing components to the District’s current procurement policy and updating definitions of types of procurement (i.e., micro-purchases, small purchases, and small acquisition threshold), to match the language used in the Uniform Guidance procurement standards. Questioned Costs: None
Criteria or specific requirement: 2 CFR Part 200 sections 200.318-327 outline the required general procurement standards, competition, and methods of procurement to be followed. These elements must be incorporated into an organization’s procurement policies and must be followed to ensure procurements are supported and covered transactions are only entered into with entities that are not federally suspended or debarred. Condition: ICEDC’s procurement policy is not in compliance with Uniform Guidance. For the sampled procurement transactions, documentation was not retained for determining that vendors were single source, as required by Uniform Guidance. In addition, documentation was not retained showing selected entities were checked for suspension and debarment prior to entering into the covered transactions. Questioned costs: None. Context: As the ICEDC procurement policy did not specify a micro purchase threshold, CLA tested all procurement transactions charged to the major program that exceeded Uniform Guidance's micro purchase threshold of $10,000 (a total of 3 procurement). The transactions were found to be out of compliance with federal procurement requirements, as documentation was not retained detailing the history of the procurement; determination process of contractors as single source, including the rationale for the method of procurement; determination of contract type; basis for contractor selection; and the basis for the contract price. Documentation should be retained to evidence that an adequate number of quotes were reviewed, that price analysis was performed, and the rationale that a procurement should be considered a noncompetitive procurement. In addition, documentation was not retained showing that the procured vendors were checked for federal suspension and debarment prior to entering into the covered transactions. Cause: Due to improper policy in place and lack of knowledge about federal procurement, suspension and debarment, and documentation requirements. Effect: Noncompliant policies and documentation can lead to selecting vendors that are federally suspended or debarred and could result in procurement of goods and services that are unideal for the federal program. Repeat Finding: No. Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done prior to entering into a covered transaction. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within ICEDC. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 sections 200.318-327 outline the required general procurement standards, competition, and methods of procurement to be followed. These elements must be incorporated into an organization’s procurement policies and must be followed to ensure procurements are supported and covered transactions are only entered into with entities that are not federally suspended or debarred. Condition: ICEDC’s procurement policy is not in compliance with Uniform Guidance. For the sampled procurement transactions, documentation was not retained for determining that vendors were single source, as required by Uniform Guidance. In addition, documentation was not retained showing selected entities were checked for suspension and debarment prior to entering into the covered transactions. Questioned costs: None. Context: As the ICEDC procurement policy did not specify a micro purchase threshold, CLA tested all procurement transactions charged to the major program that exceeded Uniform Guidance's micro purchase threshold of $10,000 (a total of 3 procurement). The transactions were found to be out of compliance with federal procurement requirements, as documentation was not retained detailing the history of the procurement; determination process of contractors as single source, including the rationale for the method of procurement; determination of contract type; basis for contractor selection; and the basis for the contract price. Documentation should be retained to evidence that an adequate number of quotes were reviewed, that price analysis was performed, and the rationale that a procurement should be considered a noncompetitive procurement. In addition, documentation was not retained showing that the procured vendors were checked for federal suspension and debarment prior to entering into the covered transactions. Cause: Due to improper policy in place and lack of knowledge about federal procurement, suspension and debarment, and documentation requirements. Effect: Noncompliant policies and documentation can lead to selecting vendors that are federally suspended or debarred and could result in procurement of goods and services that are unideal for the federal program. Repeat Finding: No. Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done prior to entering into a covered transaction. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within ICEDC. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 sections 200.318-327 outline the required general procurement standards, competition, and methods of procurement to be followed. These elements must be incorporated into an organization’s procurement policies and must be followed to ensure procurements are supported and covered transactions are only entered into with entities that are not federally suspended or debarred. Condition: ICEDC’s procurement policy is not in compliance with Uniform Guidance. For the sampled procurement transactions, documentation was not retained for determining that vendors were single source, as required by Uniform Guidance. In addition, documentation was not retained showing selected entities were checked for suspension and debarment prior to entering into the covered transactions. Questioned costs: None. Context: As the ICEDC procurement policy did not specify a micro purchase threshold, CLA tested all procurement transactions charged to the major program that exceeded Uniform Guidance's micro purchase threshold of $10,000 (a total of 3 procurement). The transactions were found to be out of compliance with federal procurement requirements, as documentation was not retained detailing the history of the procurement; determination process of contractors as single source, including the rationale for the method of procurement; determination of contract type; basis for contractor selection; and the basis for the contract price. Documentation should be retained to evidence that an adequate number of quotes were reviewed, that price analysis was performed, and the rationale that a procurement should be considered a noncompetitive procurement. In addition, documentation was not retained showing that the procured vendors were checked for federal suspension and debarment prior to entering into the covered transactions. Cause: Due to improper policy in place and lack of knowledge about federal procurement, suspension and debarment, and documentation requirements. Effect: Noncompliant policies and documentation can lead to selecting vendors that are federally suspended or debarred and could result in procurement of goods and services that are unideal for the federal program. Repeat Finding: No. Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done prior to entering into a covered transaction. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within ICEDC. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 sections 200.318-327 outline the required general procurement standards, competition, and methods of procurement to be followed. These elements must be incorporated into an organization’s procurement policies and must be followed to ensure procurements are supported and covered transactions are only entered into with entities that are not federally suspended or debarred. Condition: ICEDC’s procurement policy is not in compliance with Uniform Guidance. For the sampled procurement transactions, documentation was not retained for determining that vendors were single source, as required by Uniform Guidance. In addition, documentation was not retained showing selected entities were checked for suspension and debarment prior to entering into the covered transactions. Questioned costs: None. Context: As the ICEDC procurement policy did not specify a micro purchase threshold, CLA tested all procurement transactions charged to the major program that exceeded Uniform Guidance's micro purchase threshold of $10,000 (a total of 3 procurement). The transactions were found to be out of compliance with federal procurement requirements, as documentation was not retained detailing the history of the procurement; determination process of contractors as single source, including the rationale for the method of procurement; determination of contract type; basis for contractor selection; and the basis for the contract price. Documentation should be retained to evidence that an adequate number of quotes were reviewed, that price analysis was performed, and the rationale that a procurement should be considered a noncompetitive procurement. In addition, documentation was not retained showing that the procured vendors were checked for federal suspension and debarment prior to entering into the covered transactions. Cause: Due to improper policy in place and lack of knowledge about federal procurement, suspension and debarment, and documentation requirements. Effect: Noncompliant policies and documentation can lead to selecting vendors that are federally suspended or debarred and could result in procurement of goods and services that are unideal for the federal program. Repeat Finding: No. Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done prior to entering into a covered transaction. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within ICEDC. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 sections 200.318-327 outline the required general procurement standards, competition, and methods of procurement to be followed. These elements must be incorporated into an organization’s procurement policies and must be followed to ensure procurements are supported and covered transactions are only entered into with entities that are not federally suspended or debarred. Condition: ICEDC’s procurement policy is not in compliance with Uniform Guidance. For the sampled procurement transactions, documentation was not retained for determining that vendors were single source, as required by Uniform Guidance. In addition, documentation was not retained showing selected entities were checked for suspension and debarment prior to entering into the covered transactions. Questioned costs: None. Context: As the ICEDC procurement policy did not specify a micro purchase threshold, CLA tested all procurement transactions charged to the major program that exceeded Uniform Guidance's micro purchase threshold of $10,000 (a total of 3 procurement). The transactions were found to be out of compliance with federal procurement requirements, as documentation was not retained detailing the history of the procurement; determination process of contractors as single source, including the rationale for the method of procurement; determination of contract type; basis for contractor selection; and the basis for the contract price. Documentation should be retained to evidence that an adequate number of quotes were reviewed, that price analysis was performed, and the rationale that a procurement should be considered a noncompetitive procurement. In addition, documentation was not retained showing that the procured vendors were checked for federal suspension and debarment prior to entering into the covered transactions. Cause: Due to improper policy in place and lack of knowledge about federal procurement, suspension and debarment, and documentation requirements. Effect: Noncompliant policies and documentation can lead to selecting vendors that are federally suspended or debarred and could result in procurement of goods and services that are unideal for the federal program. Repeat Finding: No. Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done prior to entering into a covered transaction. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within ICEDC. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 sections 200.318-327 outline the required general procurement standards, competition, and methods of procurement to be followed. These elements must be incorporated into an organization’s procurement policies and must be followed to ensure procurements are supported and covered transactions are only entered into with entities that are not federally suspended or debarred. Condition: ICEDC’s procurement policy is not in compliance with Uniform Guidance. For the sampled procurement transactions, documentation was not retained for determining that vendors were single source, as required by Uniform Guidance. In addition, documentation was not retained showing selected entities were checked for suspension and debarment prior to entering into the covered transactions. Questioned costs: None. Context: As the ICEDC procurement policy did not specify a micro purchase threshold, CLA tested all procurement transactions charged to the major program that exceeded Uniform Guidance's micro purchase threshold of $10,000 (a total of 3 procurement). The transactions were found to be out of compliance with federal procurement requirements, as documentation was not retained detailing the history of the procurement; determination process of contractors as single source, including the rationale for the method of procurement; determination of contract type; basis for contractor selection; and the basis for the contract price. Documentation should be retained to evidence that an adequate number of quotes were reviewed, that price analysis was performed, and the rationale that a procurement should be considered a noncompetitive procurement. In addition, documentation was not retained showing that the procured vendors were checked for federal suspension and debarment prior to entering into the covered transactions. Cause: Due to improper policy in place and lack of knowledge about federal procurement, suspension and debarment, and documentation requirements. Effect: Noncompliant policies and documentation can lead to selecting vendors that are federally suspended or debarred and could result in procurement of goods and services that are unideal for the federal program. Repeat Finding: No. Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done prior to entering into a covered transaction. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within ICEDC. Views of responsible officials: There is no disagreement with the audit finding.
Procurement Policies and Procedures Federal Agency: U.S. Department of Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: ISA-ARPA-ADWR-123022-01 - 2023 Pass-Through Agency: State of Arizona Governor’s Office Pass-Through Number(s): ERMT-20-002 Award Period: January 1, 2023 through January 1, 2026 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Under the U.S. Code of Federal Regulations Title 2, Part 200, Uniform Administrative requires certain elements to be part of the District’s procurement standards. The general procurement standards require the District to have and use documented procurement procedures that conform to the procurement standards identified in § 200.317 through 200.327 of the Uniform Guidance. The details of this requirements can be found in Title 2, Part 200, CFR Section 318(a). Condition: During our testing, we noted the District did not have adequate internal controls designed to ensure procurement procedures that conform to Uniform Guidance were followed, or designed to ensure vendors were not suspended or debarred. Questioned costs: None Context: During our testing, it was noted that the District was not following their federal procurement policy #2023-05 to ensure compliance with CFR, Subtitle A Chapter II, Part 200, Subparts D and E when entering into vendor contracts. Also noted the District was not reviewing vendors prior to entering into a contract to ensure the vendor was not on the suspended or debarred vendor list maintained by the General Services Administration. Cause: The District does not have effective internal controls in place to ensure compliance with the Uniform Guidance procurement rules and procedures. Effect: The lack of internal controls over the provisions of procurement, suspension, and debarment compliance requirements provides an opportunity for noncompliance. Repeat Finding: Repeat of prior year finding 2022-001. Recommendation: We recommend the District design controls to ensure an adequate review process is in place to review potential contractors to determine compliance with the Uniform Guidance procurement rules and procedures. Views of responsible officials and planned corrective actions: Management concurs with the finding, and as reported in the corrective action plan, District policies will be updated and approved to conform to federal guidance.
Finding 2023-001: Procurement Policy and Related Contract Program: 66.958 Water Infrastructure Finance and Innovation Federal Agency: U.S. Environmental Protection Agency Award No: WIFIA-N18147WI Award Year: 2023 This finding is a repeat finding of 2022-001 Criteria: 2 CFR section 200.318 - General Procurement Standards, requires non-Federal entities to 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. Condition: We reviewed the water utility's procurement policy and service contracts with costs reimbursed during 2023, noting they did not contain necessary federal language related to conflicts of interest and debarment and suspension. Cause: The water utility has not received federal funding in the past and did not update their procurement policy when they sought federal funding for the Great Lakes Water Supply project. Additionally, service contracts were entered into prior to receiving federal funds. Effect: Without adequate control of contract language the water utility could enter into contracts related to the Great Lakes Water Supply project that do not qualify for federal reimbursement. Questioned Costs: None noted. Recommendation: We recommend the water utility review its procurement policy and make necessary updates to be in compliance with federal standards. Additionally, we recommend the utility enter into contract addendums related to contracts previously executed without required federal language. Management Response: Waukesha Water utility management has worked closely with WIFIA to craft contracts that include all necessary language prior to releasing RFPs for construction contracts. WIFIA was presented all service contracts to review prior to reimbursements received in fiscal year 2023. The finance department is working to update the procurement policy to ensure necessary federal language is included. The finance department will also work with service contractors to execute contract addendums.
2023 - 003 - Reporting (Material weakness in Internal Controls over Compliance) - Repeated and Modified (Prior Year Finding 2022-002) Federal program information: Funding Agency: Program Title: Federal Assistance Listing Number: U.S. Department of Housing and Urban Development (Follow-up on PY finding) Indian Housing Block Grant 14.867 U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds 21.027 Condition: The Governmental Department did not submit their required Federal Financial Reports (SF-425) and Project and Expenditure Report within the required three and one month's respectively after the end of fiscal year. In addition, the reporting package and data collection form for the year ended December 31, 2023, was not filed by the deadline of September 30, 2024, to the Federal Audit Clearinghouse. Criteria: Title 2 CFR 200.327 requires programs to submit financial information to the funding agency using standard financial reporting forms. These reports are to be submitted by the required due date and be accurately completed and supported by the underlying accounting records. In accordance with 2 CFR Section 200.512(a), the audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report, or nine months after the end of the audit period, adjusted for any extensions permitted by the Office of management and Budget. Cause: The Governmental Department policies were not always followed or controls were not in place to ensure complete and accurate information could be provided timely. Effect: The Governmental Department was not in compliance with federal regulations and guidelines for (SF-425), Project and Expenditure Report and single audit submissions. Auditor's Recommendation: The Governmental Department should implement controls for filing the Federal Financial Reports, (SF- 425), Project and Expenditure Report, and the single audit report in a timely manner. Management’s Response: Due to delays caused by the pandemic, in conjunction with some major turnover in fiscal staff the Tribe fell behind in completing its annual audits, and other required grant reporting. In the first half 2023 the Tribe was able to hire a quarter-time CFO and fill one position in the department. Since the department had staff, they were able to complete the 2022 outstanding audit. The new staff was learning the process of grant reporting and other compliance matters, and at the time of this report have made improvements to implement internal controls to assist with the regulation of all compliance matters. 2022 - 003 - Reporting (Material weakness in Internal Controls over Compliance) - Repeated (Prior Year Finding 2021-003) - Cont'd Estimated Completion Date: March 03, 2025-Due to the newly elected Tribal Administration and restructuring of positions as well as training opportunities for fiscal and the executive committee. Responsible Party: The Tribal Administrator in collaboration with the Cahto Executive Committee is responsible to ensure the Fiscal department, the Department Directors and management are trained and adhere to existing policies and procedures.
2023 - 003 - Reporting (Material weakness in Internal Controls over Compliance) - Repeated and Modified (Prior Year Finding 2022-002) Federal program information: Funding Agency: Program Title: Federal Assistance Listing Number: U.S. Department of Housing and Urban Development (Follow-up on PY finding) Indian Housing Block Grant 14.867 U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds 21.027 Condition: The Governmental Department did not submit their required Federal Financial Reports (SF-425) and Project and Expenditure Report within the required three and one month's respectively after the end of fiscal year. In addition, the reporting package and data collection form for the year ended December 31, 2023, was not filed by the deadline of September 30, 2024, to the Federal Audit Clearinghouse. Criteria: Title 2 CFR 200.327 requires programs to submit financial information to the funding agency using standard financial reporting forms. These reports are to be submitted by the required due date and be accurately completed and supported by the underlying accounting records. In accordance with 2 CFR Section 200.512(a), the audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report, or nine months after the end of the audit period, adjusted for any extensions permitted by the Office of management and Budget. Cause: The Governmental Department policies were not always followed or controls were not in place to ensure complete and accurate information could be provided timely. Effect: The Governmental Department was not in compliance with federal regulations and guidelines for (SF-425), Project and Expenditure Report and single audit submissions. Auditor's Recommendation: The Governmental Department should implement controls for filing the Federal Financial Reports, (SF- 425), Project and Expenditure Report, and the single audit report in a timely manner. Management’s Response: Due to delays caused by the pandemic, in conjunction with some major turnover in fiscal staff the Tribe fell behind in completing its annual audits, and other required grant reporting. In the first half 2023 the Tribe was able to hire a quarter-time CFO and fill one position in the department. Since the department had staff, they were able to complete the 2022 outstanding audit. The new staff was learning the process of grant reporting and other compliance matters, and at the time of this report have made improvements to implement internal controls to assist with the regulation of all compliance matters. 2022 - 003 - Reporting (Material weakness in Internal Controls over Compliance) - Repeated (Prior Year Finding 2021-003) - Cont'd Estimated Completion Date: March 03, 2025-Due to the newly elected Tribal Administration and restructuring of positions as well as training opportunities for fiscal and the executive committee. Responsible Party: The Tribal Administrator in collaboration with the Cahto Executive Committee is responsible to ensure the Fiscal department, the Department Directors and management are trained and adhere to existing policies and procedures.
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.