Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2023-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the District is the procurement standards under 2 CFR sections 200.318 through 200.327. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the District does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The District has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the District’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • General procurement standards, including oversight of contractors, conflicts of interest, and avoidance of duplicative items • Competition • Bonding requirements • Contract provisions • Federal agency or pass-through entity review • Subrecipient and contractor determinations • Retention requirements for records • Domestic preferences • Procurement of recovered materials Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the District’s procurement policy appropriately. This would include adding any missing components to the District’s current procurement policy and updating definitions of types of procurement (i.e., micro-purchases, small purchases, and small acquisition threshold), to match the language used in the Uniform Guidance procurement standards. Questioned Costs: None
2023-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the District is the procurement standards under 2 CFR sections 200.318 through 200.327. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the District does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The District has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the District’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • General procurement standards, including oversight of contractors, conflicts of interest, and avoidance of duplicative items • Competition • Bonding requirements • Contract provisions • Federal agency or pass-through entity review • Subrecipient and contractor determinations • Retention requirements for records • Domestic preferences • Procurement of recovered materials Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the District’s procurement policy appropriately. This would include adding any missing components to the District’s current procurement policy and updating definitions of types of procurement (i.e., micro-purchases, small purchases, and small acquisition threshold), to match the language used in the Uniform Guidance procurement standards. Questioned Costs: None
2023-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the District is the procurement standards under 2 CFR sections 200.318 through 200.327. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the District does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The District has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the District’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • General procurement standards, including oversight of contractors, conflicts of interest, and avoidance of duplicative items • Competition • Bonding requirements • Contract provisions • Federal agency or pass-through entity review • Subrecipient and contractor determinations • Retention requirements for records • Domestic preferences • Procurement of recovered materials Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the District’s procurement policy appropriately. This would include adding any missing components to the District’s current procurement policy and updating definitions of types of procurement (i.e., micro-purchases, small purchases, and small acquisition threshold), to match the language used in the Uniform Guidance procurement standards. Questioned Costs: None
2023-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the District is the procurement standards under 2 CFR sections 200.318 through 200.327. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the District does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The District has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the District’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • General procurement standards, including oversight of contractors, conflicts of interest, and avoidance of duplicative items • Competition • Bonding requirements • Contract provisions • Federal agency or pass-through entity review • Subrecipient and contractor determinations • Retention requirements for records • Domestic preferences • Procurement of recovered materials Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the District’s procurement policy appropriately. This would include adding any missing components to the District’s current procurement policy and updating definitions of types of procurement (i.e., micro-purchases, small purchases, and small acquisition threshold), to match the language used in the Uniform Guidance procurement standards. Questioned Costs: None
Criteria or specific requirement: 2 CFR Part 200 sections 200.318-327 outline the required general procurement standards, competition, and methods of procurement to be followed. These elements must be incorporated into an organization’s procurement policies and must be followed to ensure procurements are supported and covered transactions are only entered into with entities that are not federally suspended or debarred. Condition: ICEDC’s procurement policy is not in compliance with Uniform Guidance. For the sampled procurement transactions, documentation was not retained for determining that vendors were single source, as required by Uniform Guidance. In addition, documentation was not retained showing selected entities were checked for suspension and debarment prior to entering into the covered transactions. Questioned costs: None. Context: As the ICEDC procurement policy did not specify a micro purchase threshold, CLA tested all procurement transactions charged to the major program that exceeded Uniform Guidance's micro purchase threshold of $10,000 (a total of 3 procurement). The transactions were found to be out of compliance with federal procurement requirements, as documentation was not retained detailing the history of the procurement; determination process of contractors as single source, including the rationale for the method of procurement; determination of contract type; basis for contractor selection; and the basis for the contract price. Documentation should be retained to evidence that an adequate number of quotes were reviewed, that price analysis was performed, and the rationale that a procurement should be considered a noncompetitive procurement. In addition, documentation was not retained showing that the procured vendors were checked for federal suspension and debarment prior to entering into the covered transactions. Cause: Due to improper policy in place and lack of knowledge about federal procurement, suspension and debarment, and documentation requirements. Effect: Noncompliant policies and documentation can lead to selecting vendors that are federally suspended or debarred and could result in procurement of goods and services that are unideal for the federal program. Repeat Finding: No. Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done prior to entering into a covered transaction. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within ICEDC. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 sections 200.318-327 outline the required general procurement standards, competition, and methods of procurement to be followed. These elements must be incorporated into an organization’s procurement policies and must be followed to ensure procurements are supported and covered transactions are only entered into with entities that are not federally suspended or debarred. Condition: ICEDC’s procurement policy is not in compliance with Uniform Guidance. For the sampled procurement transactions, documentation was not retained for determining that vendors were single source, as required by Uniform Guidance. In addition, documentation was not retained showing selected entities were checked for suspension and debarment prior to entering into the covered transactions. Questioned costs: None. Context: As the ICEDC procurement policy did not specify a micro purchase threshold, CLA tested all procurement transactions charged to the major program that exceeded Uniform Guidance's micro purchase threshold of $10,000 (a total of 3 procurement). The transactions were found to be out of compliance with federal procurement requirements, as documentation was not retained detailing the history of the procurement; determination process of contractors as single source, including the rationale for the method of procurement; determination of contract type; basis for contractor selection; and the basis for the contract price. Documentation should be retained to evidence that an adequate number of quotes were reviewed, that price analysis was performed, and the rationale that a procurement should be considered a noncompetitive procurement. In addition, documentation was not retained showing that the procured vendors were checked for federal suspension and debarment prior to entering into the covered transactions. Cause: Due to improper policy in place and lack of knowledge about federal procurement, suspension and debarment, and documentation requirements. Effect: Noncompliant policies and documentation can lead to selecting vendors that are federally suspended or debarred and could result in procurement of goods and services that are unideal for the federal program. Repeat Finding: No. Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done prior to entering into a covered transaction. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within ICEDC. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 sections 200.318-327 outline the required general procurement standards, competition, and methods of procurement to be followed. These elements must be incorporated into an organization’s procurement policies and must be followed to ensure procurements are supported and covered transactions are only entered into with entities that are not federally suspended or debarred. Condition: ICEDC’s procurement policy is not in compliance with Uniform Guidance. For the sampled procurement transactions, documentation was not retained for determining that vendors were single source, as required by Uniform Guidance. In addition, documentation was not retained showing selected entities were checked for suspension and debarment prior to entering into the covered transactions. Questioned costs: None. Context: As the ICEDC procurement policy did not specify a micro purchase threshold, CLA tested all procurement transactions charged to the major program that exceeded Uniform Guidance's micro purchase threshold of $10,000 (a total of 3 procurement). The transactions were found to be out of compliance with federal procurement requirements, as documentation was not retained detailing the history of the procurement; determination process of contractors as single source, including the rationale for the method of procurement; determination of contract type; basis for contractor selection; and the basis for the contract price. Documentation should be retained to evidence that an adequate number of quotes were reviewed, that price analysis was performed, and the rationale that a procurement should be considered a noncompetitive procurement. In addition, documentation was not retained showing that the procured vendors were checked for federal suspension and debarment prior to entering into the covered transactions. Cause: Due to improper policy in place and lack of knowledge about federal procurement, suspension and debarment, and documentation requirements. Effect: Noncompliant policies and documentation can lead to selecting vendors that are federally suspended or debarred and could result in procurement of goods and services that are unideal for the federal program. Repeat Finding: No. Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done prior to entering into a covered transaction. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within ICEDC. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 sections 200.318-327 outline the required general procurement standards, competition, and methods of procurement to be followed. These elements must be incorporated into an organization’s procurement policies and must be followed to ensure procurements are supported and covered transactions are only entered into with entities that are not federally suspended or debarred. Condition: ICEDC’s procurement policy is not in compliance with Uniform Guidance. For the sampled procurement transactions, documentation was not retained for determining that vendors were single source, as required by Uniform Guidance. In addition, documentation was not retained showing selected entities were checked for suspension and debarment prior to entering into the covered transactions. Questioned costs: None. Context: As the ICEDC procurement policy did not specify a micro purchase threshold, CLA tested all procurement transactions charged to the major program that exceeded Uniform Guidance's micro purchase threshold of $10,000 (a total of 3 procurement). The transactions were found to be out of compliance with federal procurement requirements, as documentation was not retained detailing the history of the procurement; determination process of contractors as single source, including the rationale for the method of procurement; determination of contract type; basis for contractor selection; and the basis for the contract price. Documentation should be retained to evidence that an adequate number of quotes were reviewed, that price analysis was performed, and the rationale that a procurement should be considered a noncompetitive procurement. In addition, documentation was not retained showing that the procured vendors were checked for federal suspension and debarment prior to entering into the covered transactions. Cause: Due to improper policy in place and lack of knowledge about federal procurement, suspension and debarment, and documentation requirements. Effect: Noncompliant policies and documentation can lead to selecting vendors that are federally suspended or debarred and could result in procurement of goods and services that are unideal for the federal program. Repeat Finding: No. Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done prior to entering into a covered transaction. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within ICEDC. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 sections 200.318-327 outline the required general procurement standards, competition, and methods of procurement to be followed. These elements must be incorporated into an organization’s procurement policies and must be followed to ensure procurements are supported and covered transactions are only entered into with entities that are not federally suspended or debarred. Condition: ICEDC’s procurement policy is not in compliance with Uniform Guidance. For the sampled procurement transactions, documentation was not retained for determining that vendors were single source, as required by Uniform Guidance. In addition, documentation was not retained showing selected entities were checked for suspension and debarment prior to entering into the covered transactions. Questioned costs: None. Context: As the ICEDC procurement policy did not specify a micro purchase threshold, CLA tested all procurement transactions charged to the major program that exceeded Uniform Guidance's micro purchase threshold of $10,000 (a total of 3 procurement). The transactions were found to be out of compliance with federal procurement requirements, as documentation was not retained detailing the history of the procurement; determination process of contractors as single source, including the rationale for the method of procurement; determination of contract type; basis for contractor selection; and the basis for the contract price. Documentation should be retained to evidence that an adequate number of quotes were reviewed, that price analysis was performed, and the rationale that a procurement should be considered a noncompetitive procurement. In addition, documentation was not retained showing that the procured vendors were checked for federal suspension and debarment prior to entering into the covered transactions. Cause: Due to improper policy in place and lack of knowledge about federal procurement, suspension and debarment, and documentation requirements. Effect: Noncompliant policies and documentation can lead to selecting vendors that are federally suspended or debarred and could result in procurement of goods and services that are unideal for the federal program. Repeat Finding: No. Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done prior to entering into a covered transaction. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within ICEDC. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 sections 200.318-327 outline the required general procurement standards, competition, and methods of procurement to be followed. These elements must be incorporated into an organization’s procurement policies and must be followed to ensure procurements are supported and covered transactions are only entered into with entities that are not federally suspended or debarred. Condition: ICEDC’s procurement policy is not in compliance with Uniform Guidance. For the sampled procurement transactions, documentation was not retained for determining that vendors were single source, as required by Uniform Guidance. In addition, documentation was not retained showing selected entities were checked for suspension and debarment prior to entering into the covered transactions. Questioned costs: None. Context: As the ICEDC procurement policy did not specify a micro purchase threshold, CLA tested all procurement transactions charged to the major program that exceeded Uniform Guidance's micro purchase threshold of $10,000 (a total of 3 procurement). The transactions were found to be out of compliance with federal procurement requirements, as documentation was not retained detailing the history of the procurement; determination process of contractors as single source, including the rationale for the method of procurement; determination of contract type; basis for contractor selection; and the basis for the contract price. Documentation should be retained to evidence that an adequate number of quotes were reviewed, that price analysis was performed, and the rationale that a procurement should be considered a noncompetitive procurement. In addition, documentation was not retained showing that the procured vendors were checked for federal suspension and debarment prior to entering into the covered transactions. Cause: Due to improper policy in place and lack of knowledge about federal procurement, suspension and debarment, and documentation requirements. Effect: Noncompliant policies and documentation can lead to selecting vendors that are federally suspended or debarred and could result in procurement of goods and services that are unideal for the federal program. Repeat Finding: No. Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done prior to entering into a covered transaction. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within ICEDC. Views of responsible officials: There is no disagreement with the audit finding.
Procurement Policies and Procedures Federal Agency: U.S. Department of Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: ISA-ARPA-ADWR-123022-01 - 2023 Pass-Through Agency: State of Arizona Governor’s Office Pass-Through Number(s): ERMT-20-002 Award Period: January 1, 2023 through January 1, 2026 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Under the U.S. Code of Federal Regulations Title 2, Part 200, Uniform Administrative requires certain elements to be part of the District’s procurement standards. The general procurement standards require the District to have and use documented procurement procedures that conform to the procurement standards identified in § 200.317 through 200.327 of the Uniform Guidance. The details of this requirements can be found in Title 2, Part 200, CFR Section 318(a). Condition: During our testing, we noted the District did not have adequate internal controls designed to ensure procurement procedures that conform to Uniform Guidance were followed, or designed to ensure vendors were not suspended or debarred. Questioned costs: None Context: During our testing, it was noted that the District was not following their federal procurement policy #2023-05 to ensure compliance with CFR, Subtitle A Chapter II, Part 200, Subparts D and E when entering into vendor contracts. Also noted the District was not reviewing vendors prior to entering into a contract to ensure the vendor was not on the suspended or debarred vendor list maintained by the General Services Administration. Cause: The District does not have effective internal controls in place to ensure compliance with the Uniform Guidance procurement rules and procedures. Effect: The lack of internal controls over the provisions of procurement, suspension, and debarment compliance requirements provides an opportunity for noncompliance. Repeat Finding: Repeat of prior year finding 2022-001. Recommendation: We recommend the District design controls to ensure an adequate review process is in place to review potential contractors to determine compliance with the Uniform Guidance procurement rules and procedures. Views of responsible officials and planned corrective actions: Management concurs with the finding, and as reported in the corrective action plan, District policies will be updated and approved to conform to federal guidance.
Finding 2023-001: Procurement Policy and Related Contract Program: 66.958 Water Infrastructure Finance and Innovation Federal Agency: U.S. Environmental Protection Agency Award No: WIFIA-N18147WI Award Year: 2023 This finding is a repeat finding of 2022-001 Criteria: 2 CFR section 200.318 - General Procurement Standards, requires non-Federal entities to have and use documented procurement procedures, consistent with State, local and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. Condition: We reviewed the water utility's procurement policy and service contracts with costs reimbursed during 2023, noting they did not contain necessary federal language related to conflicts of interest and debarment and suspension. Cause: The water utility has not received federal funding in the past and did not update their procurement policy when they sought federal funding for the Great Lakes Water Supply project. Additionally, service contracts were entered into prior to receiving federal funds. Effect: Without adequate control of contract language the water utility could enter into contracts related to the Great Lakes Water Supply project that do not qualify for federal reimbursement. Questioned Costs: None noted. Recommendation: We recommend the water utility review its procurement policy and make necessary updates to be in compliance with federal standards. Additionally, we recommend the utility enter into contract addendums related to contracts previously executed without required federal language. Management Response: Waukesha Water utility management has worked closely with WIFIA to craft contracts that include all necessary language prior to releasing RFPs for construction contracts. WIFIA was presented all service contracts to review prior to reimbursements received in fiscal year 2023. The finance department is working to update the procurement policy to ensure necessary federal language is included. The finance department will also work with service contractors to execute contract addendums.
2023 - 003 - Reporting (Material weakness in Internal Controls over Compliance) - Repeated and Modified (Prior Year Finding 2022-002) Federal program information: Funding Agency: Program Title: Federal Assistance Listing Number: U.S. Department of Housing and Urban Development (Follow-up on PY finding) Indian Housing Block Grant 14.867 U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds 21.027 Condition: The Governmental Department did not submit their required Federal Financial Reports (SF-425) and Project and Expenditure Report within the required three and one month's respectively after the end of fiscal year. In addition, the reporting package and data collection form for the year ended December 31, 2023, was not filed by the deadline of September 30, 2024, to the Federal Audit Clearinghouse. Criteria: Title 2 CFR 200.327 requires programs to submit financial information to the funding agency using standard financial reporting forms. These reports are to be submitted by the required due date and be accurately completed and supported by the underlying accounting records. In accordance with 2 CFR Section 200.512(a), the audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report, or nine months after the end of the audit period, adjusted for any extensions permitted by the Office of management and Budget. Cause: The Governmental Department policies were not always followed or controls were not in place to ensure complete and accurate information could be provided timely. Effect: The Governmental Department was not in compliance with federal regulations and guidelines for (SF-425), Project and Expenditure Report and single audit submissions. Auditor's Recommendation: The Governmental Department should implement controls for filing the Federal Financial Reports, (SF- 425), Project and Expenditure Report, and the single audit report in a timely manner. Management’s Response: Due to delays caused by the pandemic, in conjunction with some major turnover in fiscal staff the Tribe fell behind in completing its annual audits, and other required grant reporting. In the first half 2023 the Tribe was able to hire a quarter-time CFO and fill one position in the department. Since the department had staff, they were able to complete the 2022 outstanding audit. The new staff was learning the process of grant reporting and other compliance matters, and at the time of this report have made improvements to implement internal controls to assist with the regulation of all compliance matters. 2022 - 003 - Reporting (Material weakness in Internal Controls over Compliance) - Repeated (Prior Year Finding 2021-003) - Cont'd Estimated Completion Date: March 03, 2025-Due to the newly elected Tribal Administration and restructuring of positions as well as training opportunities for fiscal and the executive committee. Responsible Party: The Tribal Administrator in collaboration with the Cahto Executive Committee is responsible to ensure the Fiscal department, the Department Directors and management are trained and adhere to existing policies and procedures.
2023 - 003 - Reporting (Material weakness in Internal Controls over Compliance) - Repeated and Modified (Prior Year Finding 2022-002) Federal program information: Funding Agency: Program Title: Federal Assistance Listing Number: U.S. Department of Housing and Urban Development (Follow-up on PY finding) Indian Housing Block Grant 14.867 U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds 21.027 Condition: The Governmental Department did not submit their required Federal Financial Reports (SF-425) and Project and Expenditure Report within the required three and one month's respectively after the end of fiscal year. In addition, the reporting package and data collection form for the year ended December 31, 2023, was not filed by the deadline of September 30, 2024, to the Federal Audit Clearinghouse. Criteria: Title 2 CFR 200.327 requires programs to submit financial information to the funding agency using standard financial reporting forms. These reports are to be submitted by the required due date and be accurately completed and supported by the underlying accounting records. In accordance with 2 CFR Section 200.512(a), the audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report, or nine months after the end of the audit period, adjusted for any extensions permitted by the Office of management and Budget. Cause: The Governmental Department policies were not always followed or controls were not in place to ensure complete and accurate information could be provided timely. Effect: The Governmental Department was not in compliance with federal regulations and guidelines for (SF-425), Project and Expenditure Report and single audit submissions. Auditor's Recommendation: The Governmental Department should implement controls for filing the Federal Financial Reports, (SF- 425), Project and Expenditure Report, and the single audit report in a timely manner. Management’s Response: Due to delays caused by the pandemic, in conjunction with some major turnover in fiscal staff the Tribe fell behind in completing its annual audits, and other required grant reporting. In the first half 2023 the Tribe was able to hire a quarter-time CFO and fill one position in the department. Since the department had staff, they were able to complete the 2022 outstanding audit. The new staff was learning the process of grant reporting and other compliance matters, and at the time of this report have made improvements to implement internal controls to assist with the regulation of all compliance matters. 2022 - 003 - Reporting (Material weakness in Internal Controls over Compliance) - Repeated (Prior Year Finding 2021-003) - Cont'd Estimated Completion Date: March 03, 2025-Due to the newly elected Tribal Administration and restructuring of positions as well as training opportunities for fiscal and the executive committee. Responsible Party: The Tribal Administrator in collaboration with the Cahto Executive Committee is responsible to ensure the Fiscal department, the Department Directors and management are trained and adhere to existing policies and procedures.
FINDING 2023-004 Subject: Drinking Water State Revolving Fund (DWSRF) Cluster - Procurement and Suspension and Debarment Federal Agency: Environmental Protection Agency Federal Program: Drinking Water State Revolving Fund Assistance Listings Number: 66.468 Federal Award Number and Year (or Other Identifying Number): DW23150901 Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed or implemented at the City to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement - Policy The City had not established a purchasing policy that reflected applicable state laws and regulations, including procedures to avoid the acquisition of unnecessary or duplicative items and procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Additionally, the City did not maintain a policy that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in evaluation of bids or proposals. INDIANA STATE BOARD OF ACCOUNTS 22 CITY OF LOGANSPORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Procurement - Small Purchases The City expended federal funds to pay 12 separate vendors to provide goods and services for the duration of the City's Lead Service Line Replacement project. A population of 5 vendors had aggregated expenditures for the audit period that were less than the simplified acquisition threshold of $150,000 but exceeded the $10,000 micro-purchase threshold. All 5 vendors were tested; for 2 of the 5 vendors, the City was unable to provide any documentation that the procurement method used was appropriate or that the procurement provided full and open competition or rationale to support the determination to limit competition. The history of the procurement, including rationale for the method of procurement, selection of the vendor, and the basis for the price, was not adequately documented. Suspension and Debarment Prior to entering into subawards and covered transactions with award funds, recipients are required to verify that vendors 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 (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Due to the agreement with the Indiana Finance Authority (IFA), the City was not required to perform testing over suspension and debarment for a majority of the vendors used; however, several drawdowns from the State Revolving Funds (SRF) program were used to reimburse the City for payments made to specific vendors. The vendors paid directly by the City were not included in the IFA's procedures for checking suspension and debarment, therefore, the City was obligated to meet the requirement. The City did not maintain a set of procedures for checking suspension and debarment status of vendors for expenditures related to the SRF awards. A total of two vendors paid directly by the City exceeded the suspension and debarment threshold of $25,000 and were subject to testing. No documentation to show that suspension and debarment was verified prior to entering into the contract could be provided for either vendor. The lack of internal controls and noncompliance was a systemic issue 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 23 CITY OF LOGANSPORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." 2 CFR 200.214 states: "Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." 2 CFR 200.318(a) states: "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 nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327." INDIANA STATE BOARD OF ACCOUNTS 24 CITY OF LOGANSPORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.318(d) states: "The non-Federal entity's procedures must avoid acquisition of unnecessary or duplicative items. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach." 2 CFR 200.319(c) states: "The non-Federal entity must conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts state licensing laws. When contracting for architectural and engineering (A/E) services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract." 2 CFR 200.319(d) states: "The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a 'brand name or equivalent' description may be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met by offers must be clearly stated; and (2) Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals." Cause The City did not maintain a procurement policy that would demonstrate the appropriate procedures to be followed when procuring with federal funding and were not aware of the need to follow federal guidelines for procurement or suspension and debarment for expenditures associated with the SRF awards. Effect Without a proper system of internal controls in place that operated effectively, noncompliance remained undetected. As a result, proper procurement procedures were not adhered to for all vendors. Without following the required methods for procurement, the City could be overpaying for services or providing federal funds to an entity that is suspended or debarred. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funds to the City. INDIANA STATE BOARD OF ACCOUNTS 25 CITY OF LOGANSPORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls to ensure expenditures made from federal awards use the appropriate procurement method and retain the documentation to support the procurement methods used in order to ensure compliance with the terms and conditions of the federal award and ensure that vendors paid from federal funds are neither suspended nor debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-002: Material Weakness - Lack of Documentation on Sole Source Contracts and Verification of Vendors Federal grantor: Department of Commerce Condition: The Chamber contract with a vendor on a sole-source basis and did not document justification for the use of a sole source vendor. In addition, the Chamber did not verify that the vendor was not on the list of vendors suspended or debarred from federal contracting before contracting with the vendor. Criteria: Entities are required to follow the procurement standards in 2 CFR sections 200.318 through 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320 and noncompetitive procurements. Entities also must comply with 2 CFR Part 1326 that prohibits entities that have been debarred, suspended or voluntarily excluded from participating in Federal procurement. Cause: The Chamber’s Procurement Policy allows for a sole source vendor but requires staff to document sole source procurements prior to initial purchase. It appears staff did not follow its policy. The Policy also contains a requirement to verify or receive vendor certification that they are not debarred, suspended, ineligible or voluntarily excluded from Federal procurements, but this procedure was not followed. Effect: The Department of Commerce may impose additional conditions on the receipt of a subsequent tranche of future award funds, if any, or take other available remedies as set forth in 2 C.F.C. section 200.339. Recommendation: We recommend the Chamber review policies with staff to ensure procurement requirements are followed, and that staff are familiar with federal procurement requirements. Views of Responsible Officials and Planned Corrective Actions: The Chamber agrees with this finding and is in the process of implementing changes to their procurement process.
Information on Federal Program – Assisting Listing Number 11.307, Economic Adjustment Assistance Criteria or Specific Requirement – Per the Uniform Guidance (2 CFR 200.327), recipients of federal awards are required to submit the Federal Financial Report (SF-425) bi-annually to the awarding agency, covering all expenditures and unobligated balances for the reporting period. 36 Condition – The auditee did not submit the required SF-425 Financial Report for the period May 1, 2023 through December 31, 2023. As a result, the required bi-annual reporting was not completed in accordance with federal requirements. Questioned Costs: $0 Context: The SF-425 for the period May 1, 2023 through December 31, 2023 was not submitted to the awarding agency. Cause - The deficiency was caused by inadequate procedures for tracking required submissions. Effect or Potential Effect - Failure to submit the required SF-425 Financial Report may result in noncompliance with federal reporting requirements, which could impact continued funding, delay reimbursement, or result in additional oversight by the awarding agency. Recommendation - We recommend that the auditee implement procedures to ensure timely submission of all required federal financial reports, including maintaining a calendar of reporting deadlines and assigning responsibility for monitoring compliance. Views of Responsible Officials – Management concurs with this finding. New personnel are now assigned responsibility for compliance and reporting, and management has completed a full review of all reporting obligations across federal awards. Management is in the process of developing standardized grant reporting procedures, enhanced tracking tools, and formal internal review controls to ensure timely and accurate submissions going forward. These procedures will be implemented by the first quarter of 2026.
Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture Compliance Requirements: Procurement. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.319(d) requires that the non-Federal entity must maintain written procedures for procurement transactions. Condition: We noted that the City did not have written procedures for procurement transactions that include the provisions required by the Procurement Standards 2 CFR § 200.318 through 2 CFR § 200.327 in fiscal year 2023. Cause: The City was not aware of the requirement to have written procedures for procurement transactions. Effect: Failure to have adequate written procedures for procurement transactions could result in the acquisition of goods or services in violation with administrative requirements, federal regulations, other procurement requirements, and Uniform Guidance requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop adequate written policies and procedures for procurement transactions. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written policies and procedures which include the relevant provisions required by 2 CFR § 200.318 through 2 CFR § 200.326 Contract provisions.
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 confirm to the procurement standards identified in CFR § 200.317 through 200.327. Condition: The Center maintans specific grant manuals and guidelines as its written policies; however, they have inconsistently or inadequately been using those manuals and guidelines. The Center made two large purchases under the Head Start grant exceeding micro-purchase thresholds without obtaining price or rate quotations from an adequate number of qualified sources. Cause: Thresholds are often considered based on unit price instead of the aggregate purchase amount based on certain grantor requirements to obtain written approval for purchases based on unit price. In addition, procedures are considered unnecessary by management for purchases falling within the grantor approved budget amounts. 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 costs with other vendors. Recommendation: We recommend management assess and adhere to the internally developed policy for all procurements using Federally sourced funds.
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 confirm to the procurement standards identified in CFR § 200.317 through 200.327. Condition: The Center maintans specific grant manuals and guidelines as its written policies; however, they have inconsistently or inadequately been using those manuals and guidelines. The Center made two large purchases under the Head Start grant exceeding micro-purchase thresholds without obtaining price or rate quotations from an adequate number of qualified sources. Cause: Thresholds are often considered based on unit price instead of the aggregate purchase amount based on certain grantor requirements to obtain written approval for purchases based on unit price. In addition, procedures are considered unnecessary by management for purchases falling within the grantor approved budget amounts. 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 costs with other vendors. Recommendation: We recommend management assess and adhere to the internally developed policy for all procurements using Federally sourced funds.
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 confirm to the procurement standards identified in CFR § 200.317 through 200.327. Condition: The Center maintans specific grant manuals and guidelines as its written policies; however, they have inconsistently or inadequately been using those manuals and guidelines. The Center made two large purchases under the Head Start grant exceeding micro-purchase thresholds without obtaining price or rate quotations from an adequate number of qualified sources. Cause: Thresholds are often considered based on unit price instead of the aggregate purchase amount based on certain grantor requirements to obtain written approval for purchases based on unit price. In addition, procedures are considered unnecessary by management for purchases falling within the grantor approved budget amounts. 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 costs with other vendors. Recommendation: We recommend management assess and adhere to the internally developed policy for all procurements using Federally sourced funds.
2023-002 GRANT REPORTING U.S. Department of Housing and Urban Development ALN 14.228 – Community Development Block Grants Contract No. IR052 (2022) Passed through the Florida Department of Commerce Criteria: Section (8) of the agreement with the Florida Department of Commerce (DOC), formerly referred to as the Florida Department of Economic Opportunity (DEO), specifies requirements for the submission of monthly, quarterly and administrative reports and other required information. These reports are detailed in Attachment G to the agreement. Section (18) of the agreement with the DOC requires the City to comply with procurement standards in 2 CFR Section 200.318 – 200.327 and Section 200.330. The agreement further requires the City to provide the DOC copies of all proposed procurement documents for their review and approval prior to the obligation or disbursement of any funds (except for administrative expenses). 2 CFR 200.303(a) requires non-Federal entities to establish and maintain effective internal controls over compliance with laws and regulations applicable to Federal funding. Condition: The Audit Certification Memo for fiscal year 2022 (due June 30, 2023) and the Section 3 Summary Report (due July 31, 2023) were not filed with the DOC. Further, the Contract and Subcontract Activity report (due on April 15, 2023) was not filed timely (filed September 7, 2023). With regards to the reimbursement request, the initial reporting was rejected due to noncompliance with procurement provisions in the grant agreement. As a result, the DOC denied $74,813 of the City’s request as ineligible expenditures. Cause of condition: The City did not have effective controls in place to ensure that all required reports were submitted on a timely basis to the DOC; nor were effective controls in place to ensure that only vendors that had been procured in accordance with the provisions of the grant agreement were included in the reimbursement request. Potential effect of condition: The City is not in compliance with the reporting requirements set forth by the grantor, nor with the procurement requirements set forth in the contract. Perspective: The City has been in communication with the DOC regarding the Section 3 requirements to assist the City and its contractor to better understand the qualitative efforts needed for hiring and recruitment of Section 3 workers. These communications have been documented on the monthly progress reports submitted to the DOC. Further, the City is in the process of negotiating an amendment to the grantor agreement. An unexecuted draft of this agreement includes language that removes the requirement for the City to file semi-annual Contract and Subcontract Activity forms, replacing them with a close-out report due at completion of the project. The proposed amendment also includes language that will require the Section 3 Summary Report to be filed quarterly rather than annually. With regards to the reimbursement request, the City resubmitted the reimbursement request subsequent to year-end to exclude the vendor identified as ineligible by the DOC. The expenditures reported on the 2023 SEFA were adjusted to reflect only eligible expenditures. Questioned costs: None. Recommendation: The City should review and revise, as needed, its current control structure over grant reporting to ensure that all required reports are prepared, independently reviewed and remitted to the grantor on a timely basis. Once the City obtains an executed amendment to the agreement, the City should update its controls to ensure the changes to the grant reporting are incorporated into their procedures. While reviewing grant agreements prior to being signed, the program manager should coordinate with the Finance Department to ensure that the City has controls in place over compliance with procurement provisions contained in the grant agreement. Management’s Response: The City has filled a position focused mainly on projects and grants reporting. The employee will verify all grant requirements are fulfilled on time and according to the grant contract. Processes are being put in place that will include conversations with the project manager which will ensure they are notified of the necessary steps to fulfill the requirements, as well as final Finance review to ensure compliance.
FINDING 2023-028 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027, Procurement and Suspension and Debarment - Lack of Required Contract Provisions See Schedule of Findings and Questioned Costs for chart/table. Condition DTMB did not include all applicable required provisions in 1 (4%) of 23 sampled contracts executed during fiscal year 2023. Criteria Federal regulation 2 CFR 200.327 states the nonfederal entity's contracts must contain the applicable provisions described in Appendix II to Part 200. Appendix II to Part 200 states, in addition to other provisions required by the federal agency or nonfederal entity, all contracts made by the nonfederal entity must contain provisions covering the provisions in Appendix II as applicable. Cause DTMB informed us the noncompliant contract was due to the utilization of an existing competitively bid contract in which the project was initially funded with nonfederal funding. DTMB stated funding source changes are not typical; when the project funding was revised, an error was made in not ensuring it included the necessary provisions. Effect The contractor may not comply with the required federal provisions because the State did not include the provisions in the contract. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend that DTMB include all applicable required provisions in contracts of federal awards. Management Views DTMB agrees with the finding.
Failure to Follow Procurement Policy Finding 2023-003 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Also, as stated in the prior finding, the procurement policy needs to be updated. Criteria: According to 2 CFR 200.214 Suspension and Debarment, Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The following excerpts are from 2 CFR Part 200.318 General Procurement Standards. (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. According to 2 CFR 200.320 Methods of Procurement to be Followed, 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. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Rufus Adams, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority will review and update its procurement policy to comply with federal requirements. The Authority’s management, consultant, and finance director will review the procedures in the policy to ensure they are being acted upon accordingly going forward.
Failure to Follow Procurement Policy Finding 2023-003 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Also, as stated in the prior finding, the procurement policy needs to be updated. Criteria: According to 2 CFR 200.214 Suspension and Debarment, Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The following excerpts are from 2 CFR Part 200.318 General Procurement Standards. (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. According to 2 CFR 200.320 Methods of Procurement to be Followed, 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. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Rufus Adams, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority will review and update its procurement policy to comply with federal requirements. The Authority’s management, consultant, and finance director will review the procedures in the policy to ensure they are being acted upon accordingly going forward.
Failure to Follow Procurement Policy Finding 2023-003 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Also, as stated in the prior finding, the procurement policy needs to be updated. Criteria: According to 2 CFR 200.214 Suspension and Debarment, Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The following excerpts are from 2 CFR Part 200.318 General Procurement Standards. (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. According to 2 CFR 200.320 Methods of Procurement to be Followed, 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. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Rufus Adams, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority will review and update its procurement policy to comply with federal requirements. The Authority’s management, consultant, and finance director will review the procedures in the policy to ensure they are being acted upon accordingly going forward.
Failure to Follow Procurement Policy Finding 2023-003 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Also, as stated in the prior finding, the procurement policy needs to be updated. Criteria: According to 2 CFR 200.214 Suspension and Debarment, Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The following excerpts are from 2 CFR Part 200.318 General Procurement Standards. (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. According to 2 CFR 200.320 Methods of Procurement to be Followed, 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. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Rufus Adams, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority will review and update its procurement policy to comply with federal requirements. The Authority’s management, consultant, and finance director will review the procedures in the policy to ensure they are being acted upon accordingly going forward.
Failure to Follow Procurement Policy Finding 2023-003 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Also, as stated in the prior finding, the procurement policy needs to be updated. Criteria: According to 2 CFR 200.214 Suspension and Debarment, Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The following excerpts are from 2 CFR Part 200.318 General Procurement Standards. (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. According to 2 CFR 200.320 Methods of Procurement to be Followed, 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. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Rufus Adams, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority will review and update its procurement policy to comply with federal requirements. The Authority’s management, consultant, and finance director will review the procedures in the policy to ensure they are being acted upon accordingly going forward.
Finding Reference: 2023-001 – I. Procurement, Suspension and Debarment Information on the Federal Program: Grantor: Department of the Treasury Program Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Criteria or Specific Requirement: For compliance requirement I.1 Procurement, Nuvance Health and Subsidiaries (the “System”) must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. The System may also use its own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: As part of our testing over the operating effectiveness of internal controls over the Procurement compliance requirement, we noted that the System did not have a procurement policy that conforms to all applicable federal laws, State and Local Fiscal Recovery Funds Regulations, and the standards contained in the Uniform Guidance, as applicable, when purchasing services with the federal funds related to the program. Cause: The System did not comply and maintain a procurement policy that conforms to the provisions required by the Uniform Guidance upon receiving federal funds related to the program. Effect or Potential Effect: Purchasing of goods and/or services with program funds may not be in compliance with the Uniform Guidance. Questioned Costs: Not applicable. Context: The System’s internal procurement policy has not been reviewed to incorporate all of the required provisions within 2 CFR 200.318 through 200.327. Identification as a repeat finding: This finding is not a repeat finding from the prior year. Recommendation: The System should update its procurement policy to include the provisions required by the Uniform Guidance for purchasing goods and/or services with federal funds. View of responsible officials: Management concurs with this finding and is currently drafting a procurement policy to incorporate the provisions required by the Uniform Guidance for purchasing goods and/or services with federal funds.
Finding Reference: 2023-001 – I. Procurement, Suspension and Debarment Information on the Federal Program: Grantor: Department of the Treasury Program Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Criteria or Specific Requirement: For compliance requirement I.1 Procurement, Nuvance Health and Subsidiaries (the “System”) must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. The System may also use its own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: As part of our testing over the operating effectiveness of internal controls over the Procurement compliance requirement, we noted that the System did not have a procurement policy that conforms to all applicable federal laws, State and Local Fiscal Recovery Funds Regulations, and the standards contained in the Uniform Guidance, as applicable, when purchasing services with the federal funds related to the program. Cause: The System did not comply and maintain a procurement policy that conforms to the provisions required by the Uniform Guidance upon receiving federal funds related to the program. Effect or Potential Effect: Purchasing of goods and/or services with program funds may not be in compliance with the Uniform Guidance. Questioned Costs: Not applicable. Context: The System’s internal procurement policy has not been reviewed to incorporate all of the required provisions within 2 CFR 200.318 through 200.327. Identification as a repeat finding: This finding is not a repeat finding from the prior year. Recommendation: The System should update its procurement policy to include the provisions required by the Uniform Guidance for purchasing goods and/or services with federal funds. View of responsible officials: Management concurs with this finding and is currently drafting a procurement policy to incorporate the provisions required by the Uniform Guidance for purchasing goods and/or services with federal funds.
Criteria The non-federal entity must have and use documented procurement procedures, consistent with the standards of §§ 200.317, §§ 200.318, and §§ 200.319 when procuring the acquisition of property or services under a Federal award or subaward. Condition The County approved a contract to be paid for with federal awards without following 2CFR200.320(b), formal procurement methods, as the contract exceed the use of 2CFR200.320(a), informal procurement methods. Cause The County was not aware of the formal procurement method requirement for Federal awards. Effect The County was out of complaince with 2CFR200.320, Methods of Procurement to be Followed. Questioned Costs $431,191 Perspective Information The County has a written Federal procurement policy in accordance with 2CFR200.317 through 200.327. The County received COVID related Federal award funds and due to the inexperience and lack of guidance on the use and compliance requirements of the award, did not procure a project in accordance with the 2CFR200.320. Identification of Repeat Findings This is not a repeat finding. Recommendation We recommend the County receive additional training related to procurement activities and expand the County's internal controls related to Federal awards. Views of Responsible Officials We agree with the audit findings and are taking corrective action to train Grant Administrators, elected officials and employees on the procurement standards related to Federal awards.
Finding 2023-004 – Procurement Policy Criteria: In accordance with Uniform Guidance 2 CFR, Part §200.318 "General Procurement Standards", the non-federal entity must have and use documented 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 document procedures must conform to the procurement standards identified in 2 CFR, Part §200.317 - §200.327. Condition: During our review of the Coalition's Policies and Procedures, we determined that the Coalition's Procurement policy does not comply with 2 CFR, Part §200.317 - §200.327. Questioned Costs: None Cause: The Coalition was unaware of the changes in General Procurement Standards within Uniform Guidance and therefore does not have sufficiently established control policies and procedures to comply with 2 CFR, Part §200.317 - §200.327. Effect: The Coalition does not have the ability to determine if disbursements, projects, and bids comply with 2 CFR, Part §200.317 - §200.327. Recommendation: We recommend the Coalition becomes familiar with requirements of 2 CFR, Part §200.317 - §200.327. and establishes appropriate internal control policies and procedures related to procurement and that all staff be trained in those policies and procedures, so they are familiar with the requirements. We further recommend no contract or agreement be awarded by the Coalition in which appropriate procurement policies have not been followed. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2023-004 – Procurement Policy Criteria: In accordance with Uniform Guidance 2 CFR, Part §200.318 "General Procurement Standards", the non-federal entity must have and use documented 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 document procedures must conform to the procurement standards identified in 2 CFR, Part §200.317 - §200.327. Condition: During our review of the Coalition's Policies and Procedures, we determined that the Coalition's Procurement policy does not comply with 2 CFR, Part §200.317 - §200.327. Questioned Costs: None Cause: The Coalition was unaware of the changes in General Procurement Standards within Uniform Guidance and therefore does not have sufficiently established control policies and procedures to comply with 2 CFR, Part §200.317 - §200.327. Effect: The Coalition does not have the ability to determine if disbursements, projects, and bids comply with 2 CFR, Part §200.317 - §200.327. Recommendation: We recommend the Coalition becomes familiar with requirements of 2 CFR, Part §200.317 - §200.327. and establishes appropriate internal control policies and procedures related to procurement and that all staff be trained in those policies and procedures, so they are familiar with the requirements. We further recommend no contract or agreement be awarded by the Coalition in which appropriate procurement policies have not been followed. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
SIGNIFICANT DEFICIENCIES 2023-001 - Reporting Federal Program Information: Department of Interior: CFDA - 15.021 - Consolidated Tribal Government Program Criteria: Title 2 CFR 200.327 requires programs to submit financial information to the funding agency using standard financial information to the funding agency using standard financial forms. These reports are to be submitted by the required due date and be accurately completed and supported by the underlying accounting records. Condition: We reviewed the reports provided and determined that they were not submitted on time. Cause: Reports were submitted after the due date. Effect: Failure to submit reports within the required reporting deadline is noncompliance with the grant requirements. Identification of Questioned Costs: None identified. Context: FY 22 and FY 23 Annual reports were reviewed and tested; Reports were signed and submitted on 7/24/24. Neither were submitted within the required time. Reporting requirements changed and guidance was not readily available. This has been rectified in FY 24. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that procedures are established to add controls over reporting to ensure the Band is compliant with grant reporting requirements including timely submission of reports. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Houlton Band of Maliseet Indians.
SIGNIFICANT DEFICIENCIES 2023-001 - Reporting Federal Program Information: Department of Interior: CFDA - 15.021 - Consolidated Tribal Government Program Criteria: Title 2 CFR 200.327 requires programs to submit financial information to the funding agency using standard financial information to the funding agency using standard financial forms. These reports are to be submitted by the required due date and be accurately completed and supported by the underlying accounting records. Condition: We reviewed the reports provided and determined that they were not submitted on time. Cause: Reports were submitted after the due date. Effect: Failure to submit reports within the required reporting deadline is noncompliance with the grant requirements. Identification of Questioned Costs: None identified. Context: FY 22 and FY 23 Annual reports were reviewed and tested; Reports were signed and submitted on 7/24/24. Neither were submitted within the required time. Reporting requirements changed and guidance was not readily available. This has been rectified in FY 24. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that procedures are established to add controls over reporting to ensure the Band is compliant with grant reporting requirements including timely submission of reports. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Houlton Band of Maliseet Indians.
SIGNIFICANT DEFICIENCIES 2023-001 - Reporting Federal Program Information: Department of Interior: CFDA - 15.021 - Consolidated Tribal Government Program Criteria: Title 2 CFR 200.327 requires programs to submit financial information to the funding agency using standard financial information to the funding agency using standard financial forms. These reports are to be submitted by the required due date and be accurately completed and supported by the underlying accounting records. Condition: We reviewed the reports provided and determined that they were not submitted on time. Cause: Reports were submitted after the due date. Effect: Failure to submit reports within the required reporting deadline is noncompliance with the grant requirements. Identification of Questioned Costs: None identified. Context: FY 22 and FY 23 Annual reports were reviewed and tested; Reports were signed and submitted on 7/24/24. Neither were submitted within the required time. Reporting requirements changed and guidance was not readily available. This has been rectified in FY 24. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that procedures are established to add controls over reporting to ensure the Band is compliant with grant reporting requirements including timely submission of reports. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Houlton Band of Maliseet Indians.
SIGNIFICANT DEFICIENCIES 2023-001 - Reporting Federal Program Information: Department of Interior: CFDA - 15.021 - Consolidated Tribal Government Program Criteria: Title 2 CFR 200.327 requires programs to submit financial information to the funding agency using standard financial information to the funding agency using standard financial forms. These reports are to be submitted by the required due date and be accurately completed and supported by the underlying accounting records. Condition: We reviewed the reports provided and determined that they were not submitted on time. Cause: Reports were submitted after the due date. Effect: Failure to submit reports within the required reporting deadline is noncompliance with the grant requirements. Identification of Questioned Costs: None identified. Context: FY 22 and FY 23 Annual reports were reviewed and tested; Reports were signed and submitted on 7/24/24. Neither were submitted within the required time. Reporting requirements changed and guidance was not readily available. This has been rectified in FY 24. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that procedures are established to add controls over reporting to ensure the Band is compliant with grant reporting requirements including timely submission of reports. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Houlton Band of Maliseet Indians.
SIGNIFICANT DEFICIENCIES 2023-001 - Reporting Federal Program Information: Department of Interior: CFDA - 15.021 - Consolidated Tribal Government Program Criteria: Title 2 CFR 200.327 requires programs to submit financial information to the funding agency using standard financial information to the funding agency using standard financial forms. These reports are to be submitted by the required due date and be accurately completed and supported by the underlying accounting records. Condition: We reviewed the reports provided and determined that they were not submitted on time. Cause: Reports were submitted after the due date. Effect: Failure to submit reports within the required reporting deadline is noncompliance with the grant requirements. Identification of Questioned Costs: None identified. Context: FY 22 and FY 23 Annual reports were reviewed and tested; Reports were signed and submitted on 7/24/24. Neither were submitted within the required time. Reporting requirements changed and guidance was not readily available. This has been rectified in FY 24. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that procedures are established to add controls over reporting to ensure the Band is compliant with grant reporting requirements including timely submission of reports. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Houlton Band of Maliseet Indians.
SIGNIFICANT DEFICIENCIES 2023-001 - Reporting Federal Program Information: Department of Interior: CFDA - 15.021 - Consolidated Tribal Government Program Criteria: Title 2 CFR 200.327 requires programs to submit financial information to the funding agency using standard financial information to the funding agency using standard financial forms. These reports are to be submitted by the required due date and be accurately completed and supported by the underlying accounting records. Condition: We reviewed the reports provided and determined that they were not submitted on time. Cause: Reports were submitted after the due date. Effect: Failure to submit reports within the required reporting deadline is noncompliance with the grant requirements. Identification of Questioned Costs: None identified. Context: FY 22 and FY 23 Annual reports were reviewed and tested; Reports were signed and submitted on 7/24/24. Neither were submitted within the required time. Reporting requirements changed and guidance was not readily available. This has been rectified in FY 24. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that procedures are established to add controls over reporting to ensure the Band is compliant with grant reporting requirements including timely submission of reports. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Houlton Band of Maliseet Indians.
SIGNIFICANT DEFICIENCIES 2023-001 - Reporting Federal Program Information: Department of Interior: CFDA - 15.021 - Consolidated Tribal Government Program Criteria: Title 2 CFR 200.327 requires programs to submit financial information to the funding agency using standard financial information to the funding agency using standard financial forms. These reports are to be submitted by the required due date and be accurately completed and supported by the underlying accounting records. Condition: We reviewed the reports provided and determined that they were not submitted on time. Cause: Reports were submitted after the due date. Effect: Failure to submit reports within the required reporting deadline is noncompliance with the grant requirements. Identification of Questioned Costs: None identified. Context: FY 22 and FY 23 Annual reports were reviewed and tested; Reports were signed and submitted on 7/24/24. Neither were submitted within the required time. Reporting requirements changed and guidance was not readily available. This has been rectified in FY 24. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that procedures are established to add controls over reporting to ensure the Band is compliant with grant reporting requirements including timely submission of reports. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Houlton Band of Maliseet Indians.
SIGNIFICANT DEFICIENCIES 2023-001 - Reporting Federal Program Information: Department of Interior: CFDA - 15.021 - Consolidated Tribal Government Program Criteria: Title 2 CFR 200.327 requires programs to submit financial information to the funding agency using standard financial information to the funding agency using standard financial forms. These reports are to be submitted by the required due date and be accurately completed and supported by the underlying accounting records. Condition: We reviewed the reports provided and determined that they were not submitted on time. Cause: Reports were submitted after the due date. Effect: Failure to submit reports within the required reporting deadline is noncompliance with the grant requirements. Identification of Questioned Costs: None identified. Context: FY 22 and FY 23 Annual reports were reviewed and tested; Reports were signed and submitted on 7/24/24. Neither were submitted within the required time. Reporting requirements changed and guidance was not readily available. This has been rectified in FY 24. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that procedures are established to add controls over reporting to ensure the Band is compliant with grant reporting requirements including timely submission of reports. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Houlton Band of Maliseet Indians.
Procurement Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.696, Certified Community Behavioral Health Clinic Expansion Grant Federal Award Identification Number and Year: 1H79SM086491-01, Program Grant Period 09/29/2022-09/29/2023 Pass-through Entity: N/A Type: Material weakness in internal control and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 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. In addition, per 2 CFR 200.318(i), the non-Federal entity must maintain records sufficient to detail the history of procurement. Condition: The Board did not utilize federal procurement requirements cited above for the project evaluation and coordination services for the Certified Community Behavioral Health Clinics project. Identification of How Likely Questioned Costs Were Computed: The questioned costs were determined from project evaluation and coordination services billed (federal portion) during the October 1, 2022, through September 29, 2023, period as summarized from the request for disbursement of funds submitted to SAMHSA. Known Questioned Costs: $150,000 Context: We tested the procurement of the one material contract and identified the contract did not follow federal procurement requirements. Cause/Effect: Prior to the Board being awarded of the grant, a bid for grant writing services was procured with the additional question of the availability of project evaluation services being able to be provided. Since the grant writing was procured and the Board decided to contract with the same consulting firm that provided the grant writing, they did not believe they needed to bid the project evaluation and coordination services for this project. The Board did not utilize federal procurement requirements to ensure fair and open competition and reasonable cost for project evaluation and coordination services for the Certified Community Behavioral Health Clinic project. Recommendation: We recommend the Board follow federal procurement as required in 2 CFR 200.319(d) for all contracts reimbursed with federal funds. View of Responsible Officials and Planned Corrective Action Plan: See attached corrective action plan.
2023-001 - Special Tests and Provisions - Wage Rate Requirements Federal Program Information: Department of Housing and Urban Development: ALN - 14.867 - Indian Housing Block Grant Criteria: The following CFR(s) apply to this finding: 2 CFR 200.327 and 29 CFR 5.5. Condition: During audit procedures, it was identified that the Housing Authority’s contracts with vendors for services related to development of Tribal Housing did not include Davis- Bacon wage requirements. It was also identified that they did not obtain copies of the required certified payrolls and the accompanying Statement of Compliance. Cause: The Housing Authority does not have the necessary internal controls over compliance. Effect: The Housing Authority’s construction projects are not in compliance with Davis- Bacon wage requirements. Identification of Questioned Costs: Payments for the identified clean-up project totalled $24,185.78, all of which were performed without contracts containing the required clauses. Related certified payrolls and accompanying Statement of Compliance were not obtained for any of the payments sampled. Context: There was a repair project identified by auditors in the samples of expenses reviewed for the grant, of which had contracts with the required clauses. There were $24,185.78 payments made for this construction project, none of which had related certified payrolls and accompanying Statement of Compliance. Auditors established the potential population of two transactions. This was not a statistically valid sample. Repeat Finding: This is a repeat finding. Recommendation: It is recommended that the Housing Authority familiarize themselves with federal Wage Rate Requirements and implement internal control processes and procedures to ensure that they are following the criteria above. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Pleasant Point Housing Authority.
2023-001 - Special Tests and Provisions - Wage Rate Requirements Federal Program Information: Department of Housing and Urban Development: ALN - 14.867 - Indian Housing Block Grant Criteria: The following CFR(s) apply to this finding: 2 CFR 200.327 and 29 CFR 5.5. Condition: During audit procedures, it was identified that the Housing Authority’s contracts with vendors for services related to development of Tribal Housing did not include Davis- Bacon wage requirements. It was also identified that they did not obtain copies of the required certified payrolls and the accompanying Statement of Compliance. Cause: The Housing Authority does not have the necessary internal controls over compliance. Effect: The Housing Authority’s construction projects are not in compliance with Davis- Bacon wage requirements. Identification of Questioned Costs: Payments for the identified clean-up project totalled $24,185.78, all of which were performed without contracts containing the required clauses. Related certified payrolls and accompanying Statement of Compliance were not obtained for any of the payments sampled. Context: There was a repair project identified by auditors in the samples of expenses reviewed for the grant, of which had contracts with the required clauses. There were $24,185.78 payments made for this construction project, none of which had related certified payrolls and accompanying Statement of Compliance. Auditors established the potential population of two transactions. This was not a statistically valid sample. Repeat Finding: This is a repeat finding. Recommendation: It is recommended that the Housing Authority familiarize themselves with federal Wage Rate Requirements and implement internal control processes and procedures to ensure that they are following the criteria above. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Pleasant Point Housing Authority.
2023-003: Procurement Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.696, Certified Community Behavioral Health Clinic Expansion Grant Federal Award Identification Number and Year: 1H79SM086680-01, Program Grant Period 09/29/2022-09/29/2023 Pass-through Entity: N/A SANILAC COUNTY COMMUNITY MENTAL HEALTH AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2023 Type: Material weakness in internal control and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 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. In addition, per 2 CFR 200.318(i), the non-Federal entity must maintain records sufficient to detail the history of procurement. Condition: The Authority did not utilize federal procurement requirements cited above for the tele-health services and SUD Peer Recovery Service contracted service providers utilized for the Certified Community Behavioral Health Clinics project. Identification of How Likely Questioned Costs Were Computed: The questioned costs were determined from the tele-health services and SUD Peer Recovery Service contractor payments billed (federal portion) during the October 1, 2022, through September 29, 2023, period as summarized from the request for disbursement of funds submitted to SAMHSA. Known Questioned Costs: $33,440 Context: We tested the procurement of the three contracts related to tele-health services and SUD Peer Recovery Service contract service providers utilized and funded by the grant and identified that two of the three contracts did not follow federal procurement requirements. Cause/Effect: Prior to the Authority being awarded the grant, tele-health services were previously being provided under a current contract. The Authority was not able to document the basis for not providing a competitive procurement of tele-health services specific to this contract nor supporting a reason it should follow a noncompetitive procurement methodology. The contract for SUD Peer Recovery Services has been indicated by management to meet the criteria as a sole source procurement as allowed under 2 CFR 200.320(c); however, adequate documentation was not available to support this claim at the time the contract was awarded (subsequently a Google search was provided of only Lapeer and Sanilac Counties). The Authority did not utilize federal procurement requirements to ensure fair and open competition and reasonable cost for tele-health services and SUD Peer Recovery Services and coordination services for the Certified Community Behavioral Health Clinic project. Recommendation: We recommend the Authority follow federal procurement as required in 2 CFR 200.319(d) for all contracts reimbursed with federal funds. View of Responsible Officials and Planned Corrective Action Plan: See attached corrective action plan.
Finding Type: Significant Deficiency in Internal Controls and Noncompliance (Procurement, Suspension & Debarment) Federal Program: U.S. Department of Treasury – Coronavirus State and Local Fiscal Recovery Funds (AL #21.027) Criteria: The Code of Federal Regulations (CFR) Section 200.318(a) requires non-Federal entities to establish and use documented procurement procedures that conform to the procurement standards identified in Sections 200.317 through 200.327. Condition: While the County does have a written procurement policy that meets the requirements, the policy was not being followed. The County did not maintain records sufficient to detail the history of procurement including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, or the basis for the contract price. The County did not maintain documentation to sufficiently support a written price analysis on one procurement tested. The County was unable to provide proposals from non-winning bidders and/or a price analysis when only one bid was received on two contracts tested. The County does not have formal procedures or controls in place to ensure written documentation of a cost analysis or a contract file are maintained. Cause: The County does not have controls in place to ensure that its procurement policy is being followed and that contract files are complete. Effect: As a result of this condition, the County did not fully comply with the Uniform Guidance. Questioned Costs: No costs have been questioned as a result of this finding. Recommendation: We recommend that the County implement controls to ensure the procurement policy is followed and complete contract files are maintained. Views of Responsible Officials: The County will work to implement controls to ensure the procurement policy is followed.