FINDING 2023-004 Information on the federal program: Subject: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Procurement and Suspension and Debarment Federal Agency: Department of Treasury Federal Program: COVID 19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): FY2022 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR section 200.318 states in part: (a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (b) Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders… Section III – Federal Award Findings and Questioned Costs (Continued) Finding 2023-003 (Continued) (h) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR section 200.320 states in part: (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate:… (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Condition: The City contracted a vendor utilizing federal funds without performing a formal bid process for projects exceeding the simplified acquisition threshold of $150,000 no did the City provide documentation supporting a noncompetitive procurement. There was available history of the procurement process, including a lack of documented City Council approval for the contract. The contract entered into also did not include the required Buy America Build America Provisions. Cause: The City’s management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Also, the City does not have written Procurement Policies that comply with the Federal Uniform Guidance requirements for non-Federal entities. The City’s current policy does not address the following requirements: • Written standards of conduct for employees involved in contracting. • Written standards for solicitations to foster full and open competition. • Micro-purchase threshold of $10,000 (listed at $25k) • Written standards for solicitations requiring a formal bid process • Written standards to rationalize limited competition purchases • Written standards to maintain historical documentation of the procurement process Effect: The failure to establish an effective internal control system placed the City at risk of noncompliance with the grant agreement and the compliance requirements. Questioned Costs: There were no questioned costs identified. Context: The City entered into three contracts funded by the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) grant during the audit period. Two of those contracts were selected for testing and the City was unable to provide any procurement history. Upon inquiry of the City on their purchasing policies and procedures, it was verified the City does not have procurement policies for purchases that conform to the requirements of the Uniform Guidance. There were $237,044 in expenditures incurred on the contracts tested in the current fiscal year. Identification as a repeat finding: No. Recommendation: We recommend that management of the City establish a proper system of internal controls and develop and implement procurement policies and procedures that adheres of the procurement requirements for purchases with federal awards as required by the 2 CFR 200 Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-002 Information on the federal program: Subject: Water and Waste Disposal Systems for Rural Communities – Procurement, Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listing Number: 10.760 Federal Award Numbers and Years (or Other Identifying Numbers): 2023 Compliance Requirement: Procurement, Suspension and Debarment Audit Findings: Material Weakness, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR section 200.318 states in part: (a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (b) Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders… (h) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR section 200.320 states in part: (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate:… (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Condition: The Town contracted a vendor utilizing federal funds without performing a formal bid process for projects exceeding the simplified acquisition threshold of $150,000 nor did the City provide documentation supporting a noncompetitive procurement. There was no available history of the procurement process. Cause: The Town’s management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Also, the Town does not have written Procurement Policies that comply with the Federal Uniform Guidance requirements for non-Federal entities. The Town’s current policy does not address the following requirements: • Written standards of conduct for employees involved in contracting. • Written standards for solicitations to foster full and open competition. • Micro-purchase threshold of $10,000 (listed at $25k) • Written standards for solicitations requiring a formal bid process • Written standards to rationalize limited competition purchases • Written standards to maintain historical documentation of the procurement process Effect: The failure to establish an effective internal control system placed the Town at risk of noncompliance with the grant agreement and the compliance requirements. Questioned Costs: There were no questioned costs identified. Context: The Town entered into three contracts funded by the Water and Waste Disposal Systems for Rural Communities (WWTP) grant during the audit period. Two of those contracts were selected for testing. For one of those contracts selected for testing, the Town was unable to provide any procurement history. There were $459,737 in expenditures incurred on the contract tested with exceptions in the current fiscal year. Identification as a repeat finding: No. Recommendation: We recommend that management of the Town establish a proper system of internal controls and develop and implement procurement policies and procedures that adheres of the procurement requirements for purchases with federal awards as required by the 2 CFR 200 Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-001 Information on the federal program: Subject: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Procurement and Suspension and Debarment Federal Agency: Department of Treasury Federal Program: COVID 19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): 65851, CY2021 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR section 200.318 states in part: (a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (b) Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders… (h) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR section 200.320 states in part: (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate:… (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Condition: The City contracted a vendor utilizing federal funds without performing a formal bid process for a project exceeding the simplified acquisition threshold of $150,000 no did the City provide documentation supporting a noncompetitive procurement. There was available history of the procurement process, including a lack of documented City Council approval for the contract. The contract entered into also did not include the required Buy America Build America Provisions. Cause: The City’s management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Also, the City does not have written Procurement Policies that comply with the Federal Uniform Guidance requirements for non-Federal entities. The City’s current policy does not address the following requirements: • Written standards of conduct for employees involved in contracting. • Written standards for solicitations to foster full and open competition. • Micro-purchase threshold of $10,000 (listed at $25k) • No formal written or documented City policy or ordinance regarding the City’s procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Effect: The failure to establish an effective internal control system placed the City at risk of noncompliance with the grant agreement and the compliance requirements. Questioned Costs: There were no questioned costs identified. Context: During the procurement contract testing, the City was unable to provide any procurement history for a selected vendor contract funded through the Coronavirus State and Local Fiscal Recovery Funds grant. The City had entered into the vendor contract based on previous experience with the vendor. Upon inquiry of the City on their purchasing policies and procedures, it was verify the City does not have procurement policies for purchases that conform to the requirements of the Uniform Guidance. Identification as a repeat finding: See Finding 2022-001 Recommendation: We recommend that management of the City establish a proper system of internal controls and develop and implement procurement policies and procedures that adheres of the procurement requirements for purchases with federal awards as required by the 2 CFR 200 Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-001 Information on the federal program: Subject: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Procurement and Suspension and Debarment Federal Agency: Department of Treasury Federal Program: COVID 19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): 65851, CY2021 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR section 200.318 states in part: (a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (b) Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders… (h) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR section 200.320 states in part: (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate:… (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Condition: The City contracted a vendor utilizing federal funds without performing a formal bid process for a project exceeding the simplified acquisition threshold of $150,000 no did the City provide documentation supporting a noncompetitive procurement. There was available history of the procurement process, including a lack of documented City Council approval for the contract. The contract entered into also did not include the required Buy America Build America Provisions. Cause: The City’s management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Also, the City does not have written Procurement Policies that comply with the Federal Uniform Guidance requirements for non-Federal entities. The City’s current policy does not address the following requirements: • Written standards of conduct for employees involved in contracting. • Written standards for solicitations to foster full and open competition. • Micro-purchase threshold of $10,000 (listed at $25k) • No formal written or documented City policy or ordinance regarding the City’s procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Effect: The failure to establish an effective internal control system placed the City at risk of noncompliance with the grant agreement and the compliance requirements. Questioned Costs: There were no questioned costs identified. Context: During the procurement contract testing, the City was unable to provide any procurement history for a selected vendor contract funded through the Coronavirus State and Local Fiscal Recovery Funds grant. The City had entered into the vendor contract based on previous experience with the vendor. Upon inquiry of the City on their purchasing policies and procedures, it was verify the City does not have procurement policies for purchases that conform to the requirements of the Uniform Guidance. Identification as a repeat finding: See Finding 2022-001 Recommendation: We recommend that management of the City establish a proper system of internal controls and develop and implement procurement policies and procedures that adheres of the procurement requirements for purchases with federal awards as required by the 2 CFR 200 Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-004: Procurement, Suspension, and Debarment (Significant Deficiency) Information on the Federal Programs: Both Major Programs Criteria or Specific Requirement: 2 CFR Section 200.318 requires that the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. In addition, 2 CFR Section 200.214 requires that, for covered transactions, a non-Federal entity must verify that entities are not suspended, debarred or otherwise excluded. This verification may be accomplished by checking the System for Award Management (SAM) website maintained by the General Services Administration. Condition: FCE did not have a documented procurement policy until January 2024. In addition, for all disbursements tested, FCE did not verify, prior to payment, that the vendors were not suspended, debarred or otherwise excluded. However, FCE provided documentation of the verification that occurred after the payments had been made and no exclusion issues were noted with the vendors. Cause: Prior to the implementation of a formal procurement policy in January 2024, FCE did not require that evidence of SAM checks be maintained in its vendor files. However, FCE performed a search after the payments had been made. In this way, FCE was able to verify that the vendors or individuals in our sample were not suspended, debarred or otherwise excluded.Effect or Potential Effect: FCE was not in compliance with the procurement policy and documentation requirements of the Uniform Guidance until January 2024. Questioned Costs: None. Repeat Finding: See Findings 2022-002 and 2022-003. Recommendation: FCE established internal controls in January 2024 to ensure proper documentation is maintained as evidence to support that it performed the required suspension and debarment searches on the SAM website.
Finding 2023-004: Procurement, Suspension, and Debarment (Significant Deficiency) Information on the Federal Programs: Both Major Programs Criteria or Specific Requirement: 2 CFR Section 200.318 requires that the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. In addition, 2 CFR Section 200.214 requires that, for covered transactions, a non-Federal entity must verify that entities are not suspended, debarred or otherwise excluded. This verification may be accomplished by checking the System for Award Management (SAM) website maintained by the General Services Administration. Condition: FCE did not have a documented procurement policy until January 2024. In addition, for all disbursements tested, FCE did not verify, prior to payment, that the vendors were not suspended, debarred or otherwise excluded. However, FCE provided documentation of the verification that occurred after the payments had been made and no exclusion issues were noted with the vendors. Cause: Prior to the implementation of a formal procurement policy in January 2024, FCE did not require that evidence of SAM checks be maintained in its vendor files. However, FCE performed a search after the payments had been made. In this way, FCE was able to verify that the vendors or individuals in our sample were not suspended, debarred or otherwise excluded.Effect or Potential Effect: FCE was not in compliance with the procurement policy and documentation requirements of the Uniform Guidance until January 2024. Questioned Costs: None. Repeat Finding: See Findings 2022-002 and 2022-003. Recommendation: FCE established internal controls in January 2024 to ensure proper documentation is maintained as evidence to support that it performed the required suspension and debarment searches on the SAM website.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: State of Arizona, the Office of the Governor Pass-Through Number(s): GR-ARPA-HHF-030122-01 and GR-ARPA-090121-01 Award Period: January 1, 2022 – November 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Condition/Context: The Organization did not maintain a formalized and written procurement policy. Criteria or specific requirement: In accordance with the Compliance Supplement, Part 6 – Internal Control, 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In accordance with 2 CFR 200.318 (a), the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. Questioned costs: None Cause: The Organization did not have formal documented procurement policies in place. Effect: The Organization was not in compliance with the Compliance Supplement and the Code of Federal Regulations related to procurement. Repeat Finding: Yes Recommendation: We recommend that the Organization adopt a formal and written procurement policy. Views of responsible officials: Management agrees with the audit condition.
Federal Program Coronavirus Capital Projects Fund (AL 21.029) Procurement Suspended and Debarred Parties Significant Deficiency 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 Meeker Cooperative Light & Power Association does not have a written procurement policy in place that adheres to Federal minimum standards. Cause Meeker Cooperative Light & Power Association does not have a written procurement policy that adheres to Federal minimum standards. Questioned Costs None Context Per inquiry with Meeker Cooperative Light & Power Association management, they do not have a procurement policy in place that adheres to Federal minimum standards. Effect Non-compliance with Procurement compliance requirements. This could result in Meeker Cooperative Light & Power Association not following state and local regulations as well as 2 CFR Part 200.317 through 200.327. Repeat Finding This is not a repeat finding. Recommendation Recommend for Meeker Cooperative Light & Power Association 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 Meeker Cooperative Light & Power Association agrees with the recommendation.
Federal Program Coronavirus Capital Projects Fund (AL 21.029) Procurement Suspended and Debarred Parties Significant Deficiency 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 Meeker Cooperative Light & Power Association does not have a written procurement policy in place that adheres to Federal minimum standards. Cause Meeker Cooperative Light & Power Association does not have a written procurement policy that adheres to Federal minimum standards. Questioned Costs None Context Per inquiry with Meeker Cooperative Light & Power Association management, they do not have a procurement policy in place that adheres to Federal minimum standards. Effect Non-compliance with Procurement compliance requirements. This could result in Meeker Cooperative Light & Power Association not following state and local regulations as well as 2 CFR Part 200.317 through 200.327. Repeat Finding This is not a repeat finding. Recommendation Recommend for Meeker Cooperative Light & Power Association 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 Meeker Cooperative Light & Power Association agrees with the recommendation.
Criteria: 2 CFR 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 conditions of the federal award. The non-Federal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.318 through 200.317 which also requires documentation to be retained to detail the history of procurements. Condition: The organization has not adopted a procurement policy containing required provisions in accordance with 2 CFR 200.318. For each of the 5 vendors selected for testing there was no documentation retained to support the rationale for the method of procurement. Additionally, the Organization did not consider whether the vendor was suspended or debarred from doing business with the federal government prior to entering the covered transaction for each of the 5 vendors selected for testing. Cause: The Organization has not adopted a procurement policy resulting in the lack of established internal controls over the procurement process. Effect: Without a written procurement policy in accordance with the Uniform Guidance, demonstrating that the program complies with laws, regulations, and other compliance requirements is difficult. Questioned Costs: None reported based on assessment of comparative pricing readily available. Context/Sampling: A nonstatistical sample of 5 vendors out of 15 vendors were selected for testing. Repeat Finding from Prior Year: No. Recommendation: We recommend management review 2 CFR 200.318 through 200.327 and adopt a procurement policy containing all required provisions including provisions to check for suspension and debarment. Views of Responsible Officials: Management is in agreement.
Lack of Formally Adopted Procurement Policy 21.027 Coronavirus State and Local Fiscal Recovery Funds (Significant Deficiency in Internal Control over Compliance) (Section I – Procurement and Suspension and Debarment) Condition: The Organization does not have a documented procurement policy in place. Criteria: Per the Uniform Guidance Compliance Supplement, Section I, Procurement and Suspension and Debarment, recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in Title 2 CFR Sections 200.317 through 200.327. Cause: The Organization obtained their first federal funding as a result of the COVID-19 pandemic. The Organization did not have a documented procurement policy in place to meet the criteria required under Uniform Guidance. As a result, even though expenditures over $15,000 require additional approvals, no documented policy was in place during 2023. Effect: Lack of a documented procurement policy could result in inappropriate vendor preferences or conflicts of interest. Recommendation: We recommend a formal written procurement policy be implemented that complies with Uniform Guidance. Management’s Response: See accompanying management’s corrective action plan.
Mental and Behavioral Health Education and Training Grants Federal Assistance Listing No. 93.732 U.S. Department of Health and Human Services Program Year 2023 Criteria or Specific Requirement – Procurement, Suspension and Debarment (2 CFR 200.317 – 200.327; 2 CFR 180.220) Condition – The District is required to follow their own documented procurement procedures which conform to the Uniform Guidance procurement standards. Questioned Costs – $76,751 Context – Out of a population of nine contracts directly charged to the grant that were above the micro-purchase threshold, 2 contracts were selected for testing. Our sampling method was not and was not meant to be statistically valid. The District did not obtain price or rate quotations from an adequate number of qualified sources for one of the vendors selected for testing. Effect – The District did not provide for full and open competition in procuring services with grant funds. Cause – The District had previously been using the vendor and added services to meet the requirements of the grant, and the District did not follow procurement procedures and policies upon charging the services to the grant. Identification as a repeat finding – N/A Recommendation – Contracts directly charged to a federal award should be reviewed to ensure compliance with the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions – Responsible Official: Aaron Davis, VP & Chief Experience Officer Planned Corrective Actions: The contract in question was for a vendor (Healthsource Solutions) already under contract with Lubbock County Hospital District dba University Medical Center prior to the grant application. The vendor in question had been used since at least 2010, with the most recent contract for the current wellness portal (Wellness +) beginning in 2017. Because of the success of the wellness portal and established relationship with the vendor, University Medical Center included expansion of existing platforms and additional services provided by Healthsource Solutions as a large component of the Methodology/Approach in the proposed activities of the grant narrative submitted. Use of this vendor and its applications were specifically outlined in the grant project narrative and a critical component of meeting grant objectives. University Medical Center follows the Lubbock County Purchasing Guidelines, which conform to the Uniform Guidance procurement standards. University Medical Center has reviewed the specified requirements of the Office of Management and Budget Uniform Guidance for procurement standards, specifically related to noncompetitive procurement and concurs that formal procurement methods were not used for expansion of new services with this existing vendor or adequate documentation was provided for noncompetitive procurement. In order to ensure compliance with the Uniform Guidance, the University Medical Center will provide training to existing grant Program Managers on Uniform Guidance procurement standards. Additionally, if a new grant is being pursued the grant committee should receive training on Uniform Guidance procurement standards before completing grant applications. On existing or future grants, any potential contracts or purchases over $75,000 should be reviewed by the grant Program Manager (or Grant Committee lead if a Program Manager has yet been assigned) to ensure all procurement guidelines are followed and sufficient documentation is obtained prior to purchase or contract execution. The corrective actions will be immediately implemented at the District.
FINDING 2023-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context The County received a total COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) allocation of $73,674,384 and chose to calculate its own revenue loss allowance, which totaled $35,932,557, to use for government services. Some SLFRF program funds expended in 2023 were expended under the revenue loss eligible use category. Additional program funds expended in 2023 were expended under the other eligible use categories. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. For funds expended under the revenue loss eligible use category, the above listed procurement requirements do not apply. During the audit period, the County had four vendors with purchases over the $10,000 micropurchase threshold which were expended under an eligible use category other than revenue loss and, as such, were considered small purchase procurements. The County did not provide competitive price quotations for the small purchase procurements for three of the four vendors, which totaled $257,038. Suspension and Debarment Prior to entering into subawards and covered transactions with SLFRF award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During the engagement, an employee of the Board of County Commissioners stated that verification was completed by checking the Excluded Parties List System when covered transactions were entered into by the County to verify that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities. Six covered transactions, totaling $3,952,203, were paid from SLFRF funds to six different vendors for goods or services that equaled or exceeded $25,000 during the audit period. Three of the six covered transactions were selected for testing. For all three transactions tested, documentation was not provided that the vendor's suspension and debarment status was verified. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . Cause The County was unable to provide documentation to demonstrate it had properly procured services. In addition, the County was unable to provide documentation to demonstrate it had checked the Excluded Parties List System, per the County's procedures, to ensure vendors were not suspended or debarred prior to entering into covered transactions that exceeded $25,000. Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot demonstrate it obtained an adequate number of price or rate quotations prior to selecting a vendor. Therefore, the County could have overpaid for the services obtained. Furthermore, without the proper implementation of an effectively designed system of internal controls, the County cannot ensure the vendors paid with federal funds are eligible to participate in federal programs. Any program funds the County used to pay vendors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Board of County Commissioners strengthen the County's system of internal controls to ensure that an adequate number of price or rate quotations are obtained for small purchase procurements. Additionally, we recommended policies and procedures be strengthened to ensure appropriate supporting documentation for federal programs is retained. Lastly, we recommended that the Board of County Commissioners strengthen the County's system of internal controls to ensure that all vendors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.318(a) requires a non-federal entity to have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR sections 200.317 through 200.327. 2 CFR section 200.318(c)(1) requires a non- federal entity to maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR section 200.318(i) requires a non-federal entity to maintain records sufficient to detail the history of procurement including, but not limited to, the: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: There are no documented procurement procedures that meet the requirements of 2 CFR sections 200.317 through 200.327 that were implemented for the fiscal year. There are no consistently implemented internal controls documented to ensure compliance with 2 CFR sections 200.317 through 200.327. 19 out of 60 procurements did not have documented an internal control over compliance. 1 of 2 simplified acquisition procurements had no documentation of the rationale for the method, documentation to support a required procurement method used, contractor selections or rejections, suspension and debarment, and bases for contract prices. The only support documented are the invoices. No covered transactions were documented as tested for suspension and debarment. Cause: There were no written procedures over procurement and when changes in management and accounting services occurred internal control documentation was not consistent and compliance requirements were not understood. Effect or Potential Effect: Procurement transactions may not be in compliance and disallowed. Questioned Costs: $22,000 – two simplified acquisitions Context: 60 ($76,181) out of 721 ($302,069) procurement transactions were tested. Two of the 721 procurements were simplified acquisitions while the remaining were micro purchases. Repeat Finding: This is a repeat of Finding 2022-005. Recommendation: The Organization should develop and document procurement procedures that meet state, local, and Uniform Guidance requirements. Internal controls should be designed, implemented, and documented within the procurement procedures to ensure compliance with 2 CFR sections 200.317 through 200.327. At a minimum, the procurement history including rationale for the method, procurement method support, contract selections and rejections, suspension and debarment, and bases for contract prices should be documented. Views of Responsible Officials: Management agrees with the finding and will implement procurement procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.318(a) requires a non-federal entity to have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR sections 200.317 through 200.327. 2 CFR section 200.318(c)(1) requires a non- federal entity to maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR section 200.318(i) requires a non-federal entity to maintain records sufficient to detail the history of procurement including, but not limited to, the: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: There are no documented procurement procedures that meet the requirements of 2 CFR sections 200.317 through 200.327 that were implemented for the fiscal year. There are no consistently implemented internal controls documented to ensure compliance with 2 CFR sections 200.317 through 200.327. 19 out of 60 procurements did not have documented an internal control over compliance. 1 of 2 simplified acquisition procurements had no documentation of the rationale for the method, documentation to support a required procurement method used, contractor selections or rejections, suspension and debarment, and bases for contract prices. The only support documented are the invoices. No covered transactions were documented as tested for suspension and debarment. Cause: There were no written procedures over procurement and when changes in management and accounting services occurred internal control documentation was not consistent and compliance requirements were not understood. Effect or Potential Effect: Procurement transactions may not be in compliance and disallowed. Questioned Costs: $22,000 – two simplified acquisitions Context: 60 ($76,181) out of 721 ($302,069) procurement transactions were tested. Two of the 721 procurements were simplified acquisitions while the remaining were micro purchases. Repeat Finding: This is a repeat of Finding 2022-005. Recommendation: The Organization should develop and document procurement procedures that meet state, local, and Uniform Guidance requirements. Internal controls should be designed, implemented, and documented within the procurement procedures to ensure compliance with 2 CFR sections 200.317 through 200.327. At a minimum, the procurement history including rationale for the method, procurement method support, contract selections and rejections, suspension and debarment, and bases for contract prices should be documented. Views of Responsible Officials: Management agrees with the finding and will implement procurement procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.318(a) requires a non-federal entity to have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR sections 200.317 through 200.327. 2 CFR section 200.318(c)(1) requires a non- federal entity to maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR section 200.318(i) requires a non-federal entity to maintain records sufficient to detail the history of procurement including, but not limited to, the: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: There are no documented procurement procedures that meet the requirements of 2 CFR sections 200.317 through 200.327 that were implemented for the fiscal year. There are no consistently implemented internal controls documented to ensure compliance with 2 CFR sections 200.317 through 200.327. 19 out of 60 procurements did not have documented an internal control over compliance. 1 of 2 simplified acquisition procurements had no documentation of the rationale for the method, documentation to support a required procurement method used, contractor selections or rejections, suspension and debarment, and bases for contract prices. The only support documented are the invoices. No covered transactions were documented as tested for suspension and debarment. Cause: There were no written procedures over procurement and when changes in management and accounting services occurred internal control documentation was not consistent and compliance requirements were not understood. Effect or Potential Effect: Procurement transactions may not be in compliance and disallowed. Questioned Costs: $22,000 – two simplified acquisitions Context: 60 ($76,181) out of 721 ($302,069) procurement transactions were tested. Two of the 721 procurements were simplified acquisitions while the remaining were micro purchases. Repeat Finding: This is a repeat of Finding 2022-005. Recommendation: The Organization should develop and document procurement procedures that meet state, local, and Uniform Guidance requirements. Internal controls should be designed, implemented, and documented within the procurement procedures to ensure compliance with 2 CFR sections 200.317 through 200.327. At a minimum, the procurement history including rationale for the method, procurement method support, contract selections and rejections, suspension and debarment, and bases for contract prices should be documented. Views of Responsible Officials: Management agrees with the finding and will implement procurement procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.318(a) requires a non-federal entity to have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR sections 200.317 through 200.327. 2 CFR section 200.318(c)(1) requires a non- federal entity to maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR section 200.318(i) requires a non-federal entity to maintain records sufficient to detail the history of procurement including, but not limited to, the: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: There are no documented procurement procedures that meet the requirements of 2 CFR sections 200.317 through 200.327 that were implemented for the fiscal year. There are no consistently implemented internal controls documented to ensure compliance with 2 CFR sections 200.317 through 200.327. 19 out of 60 procurements did not have documented an internal control over compliance. 1 of 2 simplified acquisition procurements had no documentation of the rationale for the method, documentation to support a required procurement method used, contractor selections or rejections, suspension and debarment, and bases for contract prices. The only support documented are the invoices. No covered transactions were documented as tested for suspension and debarment. Cause: There were no written procedures over procurement and when changes in management and accounting services occurred internal control documentation was not consistent and compliance requirements were not understood. Effect or Potential Effect: Procurement transactions may not be in compliance and disallowed. Questioned Costs: $22,000 – two simplified acquisitions Context: 60 ($76,181) out of 721 ($302,069) procurement transactions were tested. Two of the 721 procurements were simplified acquisitions while the remaining were micro purchases. Repeat Finding: This is a repeat of Finding 2022-005. Recommendation: The Organization should develop and document procurement procedures that meet state, local, and Uniform Guidance requirements. Internal controls should be designed, implemented, and documented within the procurement procedures to ensure compliance with 2 CFR sections 200.317 through 200.327. At a minimum, the procurement history including rationale for the method, procurement method support, contract selections and rejections, suspension and debarment, and bases for contract prices should be documented. Views of Responsible Officials: Management agrees with the finding and will implement procurement procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.318(a) requires a non-federal entity to have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR sections 200.317 through 200.327. 2 CFR section 200.318(c)(1) requires a non- federal entity to maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR section 200.318(i) requires a non-federal entity to maintain records sufficient to detail the history of procurement including, but not limited to, the: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: There are no documented procurement procedures that meet the requirements of 2 CFR sections 200.317 through 200.327 that were implemented for the fiscal year. There are no consistently implemented internal controls documented to ensure compliance with 2 CFR sections 200.317 through 200.327. 19 out of 60 procurements did not have documented an internal control over compliance. 1 of 2 simplified acquisition procurements had no documentation of the rationale for the method, documentation to support a required procurement method used, contractor selections or rejections, suspension and debarment, and bases for contract prices. The only support documented are the invoices. No covered transactions were documented as tested for suspension and debarment. Cause: There were no written procedures over procurement and when changes in management and accounting services occurred internal control documentation was not consistent and compliance requirements were not understood. Effect or Potential Effect: Procurement transactions may not be in compliance and disallowed. Questioned Costs: $22,000 – two simplified acquisitions Context: 60 ($76,181) out of 721 ($302,069) procurement transactions were tested. Two of the 721 procurements were simplified acquisitions while the remaining were micro purchases. Repeat Finding: This is a repeat of Finding 2022-005. Recommendation: The Organization should develop and document procurement procedures that meet state, local, and Uniform Guidance requirements. Internal controls should be designed, implemented, and documented within the procurement procedures to ensure compliance with 2 CFR sections 200.317 through 200.327. At a minimum, the procurement history including rationale for the method, procurement method support, contract selections and rejections, suspension and debarment, and bases for contract prices should be documented. Views of Responsible Officials: Management agrees with the finding and will implement procurement procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.318(a) requires a non-federal entity to have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR sections 200.317 through 200.327. 2 CFR section 200.318(c)(1) requires a non- federal entity to maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR section 200.318(i) requires a non-federal entity to maintain records sufficient to detail the history of procurement including, but not limited to, the: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: There are no documented procurement procedures that meet the requirements of 2 CFR sections 200.317 through 200.327 that were implemented for the fiscal year. There are no consistently implemented internal controls documented to ensure compliance with 2 CFR sections 200.317 through 200.327. 19 out of 60 procurements did not have documented an internal control over compliance. 1 of 2 simplified acquisition procurements had no documentation of the rationale for the method, documentation to support a required procurement method used, contractor selections or rejections, suspension and debarment, and bases for contract prices. The only support documented are the invoices. No covered transactions were documented as tested for suspension and debarment. Cause: There were no written procedures over procurement and when changes in management and accounting services occurred internal control documentation was not consistent and compliance requirements were not understood. Effect or Potential Effect: Procurement transactions may not be in compliance and disallowed. Questioned Costs: $22,000 – two simplified acquisitions Context: 60 ($76,181) out of 721 ($302,069) procurement transactions were tested. Two of the 721 procurements were simplified acquisitions while the remaining were micro purchases. Repeat Finding: This is a repeat of Finding 2022-005. Recommendation: The Organization should develop and document procurement procedures that meet state, local, and Uniform Guidance requirements. Internal controls should be designed, implemented, and documented within the procurement procedures to ensure compliance with 2 CFR sections 200.317 through 200.327. At a minimum, the procurement history including rationale for the method, procurement method support, contract selections and rejections, suspension and debarment, and bases for contract prices should be documented. Views of Responsible Officials: Management agrees with the finding and will implement procurement procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.318(a) requires a non-federal entity to have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR sections 200.317 through 200.327. 2 CFR section 200.318(c)(1) requires a non- federal entity to maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR section 200.318(i) requires a non-federal entity to maintain records sufficient to detail the history of procurement including, but not limited to, the: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: There are no documented procurement procedures that meet the requirements of 2 CFR sections 200.317 through 200.327 that were implemented for the fiscal year. There are no consistently implemented internal controls documented to ensure compliance with 2 CFR sections 200.317 through 200.327. 19 out of 60 procurements did not have documented an internal control over compliance. 1 of 2 simplified acquisition procurements had no documentation of the rationale for the method, documentation to support a required procurement method used, contractor selections or rejections, suspension and debarment, and bases for contract prices. The only support documented are the invoices. No covered transactions were documented as tested for suspension and debarment. Cause: There were no written procedures over procurement and when changes in management and accounting services occurred internal control documentation was not consistent and compliance requirements were not understood. Effect or Potential Effect: Procurement transactions may not be in compliance and disallowed. Questioned Costs: $22,000 – two simplified acquisitions Context: 60 ($76,181) out of 721 ($302,069) procurement transactions were tested. Two of the 721 procurements were simplified acquisitions while the remaining were micro purchases. Repeat Finding: This is a repeat of Finding 2022-005. Recommendation: The Organization should develop and document procurement procedures that meet state, local, and Uniform Guidance requirements. Internal controls should be designed, implemented, and documented within the procurement procedures to ensure compliance with 2 CFR sections 200.317 through 200.327. At a minimum, the procurement history including rationale for the method, procurement method support, contract selections and rejections, suspension and debarment, and bases for contract prices should be documented. Views of Responsible Officials: Management agrees with the finding and will implement procurement procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.318(a) requires a non-federal entity to have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR sections 200.317 through 200.327. 2 CFR section 200.318(c)(1) requires a non- federal entity to maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR section 200.318(i) requires a non-federal entity to maintain records sufficient to detail the history of procurement including, but not limited to, the: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: There are no documented procurement procedures that meet the requirements of 2 CFR sections 200.317 through 200.327 that were implemented for the fiscal year. There are no consistently implemented internal controls documented to ensure compliance with 2 CFR sections 200.317 through 200.327. 19 out of 60 procurements did not have documented an internal control over compliance. 1 of 2 simplified acquisition procurements had no documentation of the rationale for the method, documentation to support a required procurement method used, contractor selections or rejections, suspension and debarment, and bases for contract prices. The only support documented are the invoices. No covered transactions were documented as tested for suspension and debarment. Cause: There were no written procedures over procurement and when changes in management and accounting services occurred internal control documentation was not consistent and compliance requirements were not understood. Effect or Potential Effect: Procurement transactions may not be in compliance and disallowed. Questioned Costs: $22,000 – two simplified acquisitions Context: 60 ($76,181) out of 721 ($302,069) procurement transactions were tested. Two of the 721 procurements were simplified acquisitions while the remaining were micro purchases. Repeat Finding: This is a repeat of Finding 2022-005. Recommendation: The Organization should develop and document procurement procedures that meet state, local, and Uniform Guidance requirements. Internal controls should be designed, implemented, and documented within the procurement procedures to ensure compliance with 2 CFR sections 200.317 through 200.327. At a minimum, the procurement history including rationale for the method, procurement method support, contract selections and rejections, suspension and debarment, and bases for contract prices should be documented. Views of Responsible Officials: Management agrees with the finding and will implement procurement procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.318(a) requires a non-federal entity to have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR sections 200.317 through 200.327. 2 CFR section 200.318(c)(1) requires a non- federal entity to maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR section 200.318(i) requires a non-federal entity to maintain records sufficient to detail the history of procurement including, but not limited to, the: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: There are no documented procurement procedures that meet the requirements of 2 CFR sections 200.317 through 200.327 that were implemented for the fiscal year. There are no consistently implemented internal controls documented to ensure compliance with 2 CFR sections 200.317 through 200.327. 19 out of 60 procurements did not have documented an internal control over compliance. 1 of 2 simplified acquisition procurements had no documentation of the rationale for the method, documentation to support a required procurement method used, contractor selections or rejections, suspension and debarment, and bases for contract prices. The only support documented are the invoices. No covered transactions were documented as tested for suspension and debarment. Cause: There were no written procedures over procurement and when changes in management and accounting services occurred internal control documentation was not consistent and compliance requirements were not understood. Effect or Potential Effect: Procurement transactions may not be in compliance and disallowed. Questioned Costs: $22,000 – two simplified acquisitions Context: 60 ($76,181) out of 721 ($302,069) procurement transactions were tested. Two of the 721 procurements were simplified acquisitions while the remaining were micro purchases. Repeat Finding: This is a repeat of Finding 2022-005. Recommendation: The Organization should develop and document procurement procedures that meet state, local, and Uniform Guidance requirements. Internal controls should be designed, implemented, and documented within the procurement procedures to ensure compliance with 2 CFR sections 200.317 through 200.327. At a minimum, the procurement history including rationale for the method, procurement method support, contract selections and rejections, suspension and debarment, and bases for contract prices should be documented. Views of Responsible Officials: Management agrees with the finding and will implement procurement procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.318(a) requires a non-federal entity to have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR sections 200.317 through 200.327. 2 CFR section 200.318(c)(1) requires a non- federal entity to maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR section 200.318(i) requires a non-federal entity to maintain records sufficient to detail the history of procurement including, but not limited to, the: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: There are no documented procurement procedures that meet the requirements of 2 CFR sections 200.317 through 200.327 that were implemented for the fiscal year. There are no consistently implemented internal controls documented to ensure compliance with 2 CFR sections 200.317 through 200.327. 19 out of 60 procurements did not have documented an internal control over compliance. 1 of 2 simplified acquisition procurements had no documentation of the rationale for the method, documentation to support a required procurement method used, contractor selections or rejections, suspension and debarment, and bases for contract prices. The only support documented are the invoices. No covered transactions were documented as tested for suspension and debarment. Cause: There were no written procedures over procurement and when changes in management and accounting services occurred internal control documentation was not consistent and compliance requirements were not understood. Effect or Potential Effect: Procurement transactions may not be in compliance and disallowed. Questioned Costs: $22,000 – two simplified acquisitions Context: 60 ($76,181) out of 721 ($302,069) procurement transactions were tested. Two of the 721 procurements were simplified acquisitions while the remaining were micro purchases. Repeat Finding: This is a repeat of Finding 2022-005. Recommendation: The Organization should develop and document procurement procedures that meet state, local, and Uniform Guidance requirements. Internal controls should be designed, implemented, and documented within the procurement procedures to ensure compliance with 2 CFR sections 200.317 through 200.327. At a minimum, the procurement history including rationale for the method, procurement method support, contract selections and rejections, suspension and debarment, and bases for contract prices should be documented. Views of Responsible Officials: Management agrees with the finding and will implement procurement procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.318(a) requires a non-federal entity to have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR sections 200.317 through 200.327. 2 CFR section 200.318(c)(1) requires a non- federal entity to maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR section 200.318(i) requires a non-federal entity to maintain records sufficient to detail the history of procurement including, but not limited to, the: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: There are no documented procurement procedures that meet the requirements of 2 CFR sections 200.317 through 200.327 that were implemented for the fiscal year. There are no consistently implemented internal controls documented to ensure compliance with 2 CFR sections 200.317 through 200.327. 19 out of 60 procurements did not have documented an internal control over compliance. 1 of 2 simplified acquisition procurements had no documentation of the rationale for the method, documentation to support a required procurement method used, contractor selections or rejections, suspension and debarment, and bases for contract prices. The only support documented are the invoices. No covered transactions were documented as tested for suspension and debarment. Cause: There were no written procedures over procurement and when changes in management and accounting services occurred internal control documentation was not consistent and compliance requirements were not understood. Effect or Potential Effect: Procurement transactions may not be in compliance and disallowed. Questioned Costs: $22,000 – two simplified acquisitions Context: 60 ($76,181) out of 721 ($302,069) procurement transactions were tested. Two of the 721 procurements were simplified acquisitions while the remaining were micro purchases. Repeat Finding: This is a repeat of Finding 2022-005. Recommendation: The Organization should develop and document procurement procedures that meet state, local, and Uniform Guidance requirements. Internal controls should be designed, implemented, and documented within the procurement procedures to ensure compliance with 2 CFR sections 200.317 through 200.327. At a minimum, the procurement history including rationale for the method, procurement method support, contract selections and rejections, suspension and debarment, and bases for contract prices should be documented. Views of Responsible Officials: Management agrees with the finding and will implement procurement procedures.
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.
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.
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.
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.