Finding No. 2022-004: Procurement Policy ? Material Weakness in Internal Control Over Financial Reporting; U.S. Department of Health and Human Services, Rare Disorders: Research, Surveillance, Health Promotion, and Education; Assistance Listing Number 93.315 Condition There is no evidence of a documented formal procurement policy with regards to federal grant awards and expenditures, no documented support that a competitive price analysis for vendors and organizations funded with federal grant funds were performed and no evidence that suspension and debarment verifications were performed for certain vendors and organizations, as required by the general procurement standards of the Uniform Guidance. Context We selected four samples which were deemed sole sourced by management and noted no written documentation for this conclusion or evidence of suspension or debarment verification being performed was maintained in the file. Based on our discussions with management, they were not aware of the Uniform Guidance requirements with regards to procurement. Criteria Under the Uniform Guidance Section 200.318, General Procurement Standards, a non-Federal entity must have and use documented procurement procedures 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 Sections 200.317 through 200.327. These sections include policies and procedures related to competition, informal and formal procurement methods and noncompetitive procurement also known as sole source. Under Uniform Guidance Section 200.214, Suspension and Debarment, and 2 CFR Part 180, non-federal entities are required to verify that vendors are not suspended or debarred from participating in federal funds. Cause Management stated it was not aware of the Uniform Guidance requirements with regards to procurement and, therefore, did not develop a procurement policy that includes the provisions of the general procurement standards required under the Uniform Guidance. Effect Charges relating to vendor services and sub-awards that were charged to the federal award may not be in accordance with the specific compliance requirements of the Uniform Guidance. Questioned Costs $97,078, representing total sub-awards and consulting expenses paid during the year. Repeat Finding No. Recommendation We recommend that the Association establish a written procurement policy governing contracts with vendors that will be reimbursed by federal grants to incorporate all of the provisions included in the general procurement standards of the Uniform Guidance Section 200.318 and the debarment and suspension regulations of Uniform Guidance Section 200.214. We also recommend that a review of all existing vendor or sub-awardee contract files be performed to ensure that the documentation as required under the Uniform Guidance is maintained in the files. Views of Responsible Officials and Planned Corrective Action See corrective action plan.
Finding 2022-002 Assistance Listing 10.766 Title Community Facility Loans and Grants Federal Grantor U.S. Department of Agriculture Compliance Area Reporting Type of Finding Internal Control ? Significant Deficiency Questioned Costs None Reported Repeat Finding No Criteria 2 CFR 200.327 establishes that reports be complete, accurate, and supported by accounting records (if applicable) and be submitted in compliance with the appropriate deadlines. Condition Westward Heights submitted the proposed 2023 annual budget to the USDA February 21, 2023. The 3rd Quarter Report was submitted November 18, 2022. The annual budget was due November 30, 2022. Quarterly reports are due by the end of the following month. Cause Westward Heights did not have an internal control policy in place to ensure timely closing of month-end or year-end financials. Effect The lack of policy resulted in multiple reports being submitted to the USDA after the due date. Recommendation We recommend that Westward Heights establish deadlines for accounting personnel to complete month-end and year-end financials. Views of Responsible Officials Management and Westward Heights? Board of Directors agree with the finding. See Westward Heights? Corrective Action Plan.
U.S Department of Treasury Finding 2022.001 CFDA# 21.027 - Coronavirus State and Local Fiscal Recovery Fund Compliance Requirement - Procurement Condition: NCHC did not have adequate procurement policies in effect that meet the minimum federal requirements for procurement standards. Criteria: Under Uniform Guidance, NCHC is required to implement certain written procurement policies that adhere to the minimum federal requirements as outlined at 2 CFR 200.318 through 200.327. Context: During the audit, it was determined that NCHC's procurement policies did not meet minimum federal requirements. Cause: NCHC did not have adequate procurement policies in effect that meet the minimum federal requirements. Effect: NCHC was not in compliance with 2 CFR 200.318 through 200.327 and as a result did not perform proper procurement procedures over all transactions. Recommendations: We recommend NCHC implement policies and procedures that adhere to the minimum procurement requirements as outlined in federal procurement standards 2 CFR 200.318 through 200.327. View of Responsible NCHC will implement policies and procedures to ensure compliance with the Officials: requirements as outlined in 2 CFR 200.318 through 200.327.
Identification of the Federal Program: U.S. Department of Health and Human Services ? COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Distribution ? 93.498 Criteria: RWHS must establish and maintain effective internal control over federal awards that provides reasonable assurance that RWHS is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with program requirements. Terms and conditions of the federal award require the quarterly revenue on an actual and budgeted basis to be reported to the federal agency by March 31, 2023. Condition: RWHS submitted instances of inaccurate actual revenue for quarters 3 and 4 of 2021 and 2022 and inaccurate budgeted revenue for quarters 2 and 3 of 2021. Cause: RWHS did not have a control in place to assure proper reporting of the quarterly revenue totals. Effect: The quarterly revenue totals reported to the federal agency were inaccurate in 2021 and 2022. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend management implement procedures to ensure that the required revenue totals are reported accurately in accordance with the terms and conditions of the federal award. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
Finding 2022-001: Procurement policy and related contract This finding is a repeat finding of 2021-001 Criteria: 2 CFR section 200.318 ? General Procurement Standards, requires non-Federal entity 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 2022, 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 2022. 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.
2022-002 Department of Treasury, State of South Dakota Governor?s Office of Economic Development Federal Financial Assistance Listing 21.027, ConnectSD 2021-03, 2021-05 and 2021-07 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.318(c)(1) provides that the auditee must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR 200.319(c) establishes that the auditee must have written procedures for procurement transactions that follow the procurement standards in 2 CFR sections 200.318 through 200.327 ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in sections therein. As outlined in 2 CFR 180, recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition: The Company has not documented their internal controls for compliance with the procurement, suspension and debarment compliance requirement of Uniform Guidance as outlined above. The Company does not have a written policy related to procurement or written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurement, as well as, established procedures in place related to suspension and debarment. The Company did not follow the procurement method required based on the dollar amount and conditions specified in 2 CFR 200.320. For contracted vendors with expenditures in excess of $25,000, the Company did not verify vendors were not suspended or debarred prior to entering into transaction with the vendor. Cause: The Company relied on the previous work history with vendors frequently used and did not have a process in place to monitor compliance with suspension and debarment requirements. Effect: Inadequate controls over this area of compliance result in a reasonable possibility that the Company would not have the required documentation in place and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: We were unable to determine known questioned costs. There were three vendor transactions above the $4,000 micro purchase threshold without adequate procurement documentation which had cumulative draws in 2022 of $1,993,222. Context/Sampling: Procurement requirements were applicable to three vendors. Two vendors had expenditures in excess of $250,000. Suspension and debarment requirements were applicable to 3 vendors. Repeat Finding from Prior Year: No Recommendation: We recommend management implement formal procedures over procurement, suspension and debarment in accordance with requirements noted above. Views of Responsible Officials: Management agrees with the finding.
2022-002 Department of Treasury, State of South Dakota Governor?s Office of Economic Development Federal Financial Assistance Listing 21.027, ConnectSD 2021-03, 2021-05 and 2021-07 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.318(c)(1) provides that the auditee must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR 200.319(c) establishes that the auditee must have written procedures for procurement transactions that follow the procurement standards in 2 CFR sections 200.318 through 200.327 ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in sections therein. As outlined in 2 CFR 180, recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition: The Company has not documented their internal controls for compliance with the procurement, suspension and debarment compliance requirement of Uniform Guidance as outlined above. The Company does not have a written policy related to procurement or written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurement, as well as, established procedures in place related to suspension and debarment. The Company did not follow the procurement method required based on the dollar amount and conditions specified in 2 CFR 200.320. For contracted vendors with expenditures in excess of $25,000, the Company did not verify vendors were not suspended or debarred prior to entering into transaction with the vendor. Cause: The Company relied on the previous work history with vendors frequently used and did not have a process in place to monitor compliance with suspension and debarment requirements. Effect: Inadequate controls over this area of compliance result in a reasonable possibility that the Company would not have the required documentation in place and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: We were unable to determine known questioned costs. There were three vendor transactions above the $4,000 micro purchase threshold without adequate procurement documentation which had cumulative draws in 2022 of $1,993,222. Context/Sampling: Procurement requirements were applicable to three vendors. Two vendors had expenditures in excess of $250,000. Suspension and debarment requirements were applicable to 3 vendors. Repeat Finding from Prior Year: No Recommendation: We recommend management implement formal procedures over procurement, suspension and debarment in accordance with requirements noted above. Views of Responsible Officials: Management agrees with the finding.
2022-002 Department of Treasury, State of South Dakota Governor?s Office of Economic Development Federal Financial Assistance Listing 21.027, ConnectSD 2021-03, 2021-05 and 2021-07 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.318(c)(1) provides that the auditee must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR 200.319(c) establishes that the auditee must have written procedures for procurement transactions that follow the procurement standards in 2 CFR sections 200.318 through 200.327 ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in sections therein. As outlined in 2 CFR 180, recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition: The Company has not documented their internal controls for compliance with the procurement, suspension and debarment compliance requirement of Uniform Guidance as outlined above. The Company does not have a written policy related to procurement or written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurement, as well as, established procedures in place related to suspension and debarment. The Company did not follow the procurement method required based on the dollar amount and conditions specified in 2 CFR 200.320. For contracted vendors with expenditures in excess of $25,000, the Company did not verify vendors were not suspended or debarred prior to entering into transaction with the vendor. Cause: The Company relied on the previous work history with vendors frequently used and did not have a process in place to monitor compliance with suspension and debarment requirements. Effect: Inadequate controls over this area of compliance result in a reasonable possibility that the Company would not have the required documentation in place and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: We were unable to determine known questioned costs. There were three vendor transactions above the $4,000 micro purchase threshold without adequate procurement documentation which had cumulative draws in 2022 of $1,993,222. Context/Sampling: Procurement requirements were applicable to three vendors. Two vendors had expenditures in excess of $250,000. Suspension and debarment requirements were applicable to 3 vendors. Repeat Finding from Prior Year: No Recommendation: We recommend management implement formal procedures over procurement, suspension and debarment in accordance with requirements noted above. Views of Responsible Officials: Management agrees with the finding.
2022-005 Assistance Listing Number 21.027 Coronavirus State and Local Fiscal Recovery Funds Department of Treasury North Dakota State Water Commission Procurement Suspension & Debarment 2 CFR Part 200.318 Criteria 2 CFR Part 200.318 states that a non-Federal entity must have and use documented procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR part 200.317 through 200.327. Condition District does not have a written procurement policy in place. Cause The District has not approved a written procurement policy. Effect Non-compliance with Procurement Suspension & Debarment compliance requirements. Questioned Costs Not Applicable Repeat Finding This is not a repeat finding. Recommendation We recommend for the board of the District to create and implement a procurement policy that adheres to state and local regulations as well as 2 CFR Part 200.317 through 200.327. Views of Responsible Officials and Planned Corrective Actions The District will create and approve a procurement policy that adheres to state and local regulations as well as 2 CFR Part 200.317 through 200.327.
Finding 2022-006 Procurement, Suspension, and Debarment – Material Weakness. Criteria: In accordance with §200.318, the non-federal entity must use its own documented procurement procedures which reflect applicable laws and regulations, provided that the procurements conform to applicable federal law and the standards identified. Additionally, the nonfederal entity must maintain records sufficient to detail the history of the procurement. These records are required to 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. All procurement transactions must be conducted in in accordance with §200.317 through §200.327. In accordance with §200.214 non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a non-federal entity. Condition: The Organization also has standard procurement procedures in place guiding purchasing decisions. However, due to need for expediency in choosing a contract that is partially funded by the federal award, the board of directors approved waiving the normal bidding process. The Organization also did not perform or document suspension and debarment checks on prospective vendors and subrecipients. Cause: The Organization’s personnel did not ensure to follow documented policies and procedures for selecting a contractor that were in compliance with the CFR 200. Additionally, the Organization did not have adequate internal controls in place to identify the need to ensure a check for suspended or debarred vendors on contractors occurred and was documented prior to entering into those agreements. Effect: Failure to maintain policies for vendor selection process and failure to obtain vendor solicitation for procurements is noncompliance with federal regulations. This leads to the possibility that resources were purchased from vendors who were suspended and/or debarred. Questioned Costs: Unknown Repeat Finding: Not applicable as the Organization is a first time auditee. Recommendation: Standard forms should be updated to incorporate procurement and suspension and debarment criteria for both vendors and subrecipients. Controls should be implemented to ensure that the procurement decisions and suspension and debarment checks are reviewed by an appropriate member of management and are properly stored for future reference. Views of Responsible Official: See Corrective Action Plan.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: State of Arizona, the Office of the Governor Pass-Through Number(s): GR-ARPA-AHCA-050122-01 Award Period: May 1, 2022 - June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Condition/Context: The following compliance matters were noted over procurement: 1. The Association did not maintain a formalized and written procurement policy. 2. Twelve vendor purchases for workforce development training, with costs between $10,000 and $15,000 each, were selected for testing. However, the Association did not follow the required solicitation or bidding procedures for any of its workforce development training vendors or program. The Association awarded contracts to all vendors within the state that elected to participate in the program. 3. For three of three vendors tested, procedures to determine that the vendors were not included on the suspended or debarred vendor list maintained by the General Services Administration were not performed. Criteria or specific requirement: In accordance with the Compliance Supplement, Part 6 – Internal Control, 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In accordance with 2 CFR 200.318 (a), the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. In accordance with 2 CFR 200.320 (a)(2)(i), 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. 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. Criteria or specific requirement (Continued) In accordance with 2 CFR 200.320 (b)(1 and 2), 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. Formal procurement methods - when the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) sealed bids, or (2) proposals. In accordance with 2 CFR 200.320 (c), 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. Noncompetitive procurement: there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. In accordance with 2 CFR 180.220, the non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220). All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Questioned costs: None. Cause: The Organization did not have established procurement policies and did not have internal controls designed to ensure compliance with those policies. Management awarded training contracts to all vendors who agreed to participate in the grant award program. Effect: The Organization was not in compliance with the Compliance Supplement and the Code of Federal Regulations related to procurement and suspension and debarment provisions. Repeat Finding: No Recommendation: We recommend that the Organization adopt a formal and written procurement policy. Additionally, management should develop controls to help ensure procurement procedures are followed and to monitor the amount spent with vendors throughout the year to ensure procurement procedures are initiated when the vendor costs exceed the procurement thresholds. These procedures will help ensure compliance with Compliance Supplement and the Code of Federal Regulations related to procurement and suspension and debarment provisions. Views of responsible officials: Management agrees with the audit condition.
Finding 2022–003: Procurement Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.318, General procurement standards (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 non-Federal entity's documented procurement procedures must conform to the procurement standards identified in Section 200.317 through 200.327.” Section 200.318 (i) states “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.” SDA’s Fiscal Policies and Procedures Manual updated July 21, 2022 (“the Manual”) states “Procurement shall be made using one of the following methods: 1) Micro and Small Purchase Threshold; 2) Competitive Sealed Bids and Competitive Negotiations and 3) Non-Competitive Negotiations. All methods of procurement, when funded by federal grants or contracts, must follow procurement requirements contained in the OMB, Uniform Administrative Requirements, Costs Principles, and Audit Requirements for federal awards. Any purchases over $10,000 must bid competitively if subject to a single federal audit.” In addition, the Manual states “purchases related to Federally funded grants over $10,000 will be bid through either a Request for Proposal (RFP) or Request for Qualifications (RFQ) process. In addition, Request for Information (RFI) process may be used to help inform the development of either RFP, RFQ or other forms of procurement. Awards will be awarded to responses that meet the outlined criteria and reflect the lowest responsible bid. Contractors will be excluded from conducting business with the SDA if the contractor has been debarred and/or suspended from conducting business with the federal government. On a regular basis, the SDA will check vendors for any debarment status change on the federal System for Award Management (SAM). All source documents supporting any given transaction (e.g., receipts, invoices, and RFP data) will be retained and filed with SDA contract files in a centralized location. At a minimum, source document data must be sufficient to establish the basis for selection, the basis for the cost (including the reasonableness of cost), the rationale for the method of procurement and selection of contract type, and the basis for payment.” Condition During the current audit period, SDA did not adequately ensure federally funded contract issued to vendors followed federal regulations and its internal policy, which includes maintaining documents to support its procurement decisions. Cause Based on our discussions with management, SDA completed the RFQ process for this vendor but did not maintain the documentation of the decision-making process and scoring as outlined in its procurement policy. The documentation was deleted by a staff member who left the organization. Effect The failure to maintain adequate documentation to support the procurement of federally funded contracts is a violation of federal regulations. Questioned Costs None. Context During the test of procurement, SDA management identified two contracts with expenditures over the $10,000 threshold requiring competitive bid per its internal policy. For one contract, management noted that procurement was completed in 2021, hence outside the audit period. For the second contract, we noted that while an RFQ was obtained from the contractor, there was no evidence to support the basis for contractor selection (based on evaluation criteria and scoring outlined in the RFQ), the basis for the contract price, and evidence that debarment/suspension verification checks were performed prior to awarding the contract. Identification of Repeated Findings None. Recommendation We recommend that SDA’s management adhere to its written policy and maintain documentation to support all management decisions related to federally funded procurements to comply with federal regulations. Also, SDA should consider creating a checklist/internal form to document its procurement decisions and related approvals, as required. We also recommend that SDA develop procedures to identify all federally funded contracts let/awarded during the fiscal year to ensure compliance with its internal policy. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.
Finding 2022–003: Procurement Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.318, General procurement standards (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 non-Federal entity's documented procurement procedures must conform to the procurement standards identified in Section 200.317 through 200.327.” Section 200.318 (i) states “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.” SDA’s Fiscal Policies and Procedures Manual updated July 21, 2022 (“the Manual”) states “Procurement shall be made using one of the following methods: 1) Micro and Small Purchase Threshold; 2) Competitive Sealed Bids and Competitive Negotiations and 3) Non-Competitive Negotiations. All methods of procurement, when funded by federal grants or contracts, must follow procurement requirements contained in the OMB, Uniform Administrative Requirements, Costs Principles, and Audit Requirements for federal awards. Any purchases over $10,000 must bid competitively if subject to a single federal audit.” In addition, the Manual states “purchases related to Federally funded grants over $10,000 will be bid through either a Request for Proposal (RFP) or Request for Qualifications (RFQ) process. In addition, Request for Information (RFI) process may be used to help inform the development of either RFP, RFQ or other forms of procurement. Awards will be awarded to responses that meet the outlined criteria and reflect the lowest responsible bid. Contractors will be excluded from conducting business with the SDA if the contractor has been debarred and/or suspended from conducting business with the federal government. On a regular basis, the SDA will check vendors for any debarment status change on the federal System for Award Management (SAM). All source documents supporting any given transaction (e.g., receipts, invoices, and RFP data) will be retained and filed with SDA contract files in a centralized location. At a minimum, source document data must be sufficient to establish the basis for selection, the basis for the cost (including the reasonableness of cost), the rationale for the method of procurement and selection of contract type, and the basis for payment.” Condition During the current audit period, SDA did not adequately ensure federally funded contract issued to vendors followed federal regulations and its internal policy, which includes maintaining documents to support its procurement decisions. Cause Based on our discussions with management, SDA completed the RFQ process for this vendor but did not maintain the documentation of the decision-making process and scoring as outlined in its procurement policy. The documentation was deleted by a staff member who left the organization. Effect The failure to maintain adequate documentation to support the procurement of federally funded contracts is a violation of federal regulations. Questioned Costs None. Context During the test of procurement, SDA management identified two contracts with expenditures over the $10,000 threshold requiring competitive bid per its internal policy. For one contract, management noted that procurement was completed in 2021, hence outside the audit period. For the second contract, we noted that while an RFQ was obtained from the contractor, there was no evidence to support the basis for contractor selection (based on evaluation criteria and scoring outlined in the RFQ), the basis for the contract price, and evidence that debarment/suspension verification checks were performed prior to awarding the contract. Identification of Repeated Findings None. Recommendation We recommend that SDA’s management adhere to its written policy and maintain documentation to support all management decisions related to federally funded procurements to comply with federal regulations. Also, SDA should consider creating a checklist/internal form to document its procurement decisions and related approvals, as required. We also recommend that SDA develop procedures to identify all federally funded contracts let/awarded during the fiscal year to ensure compliance with its internal policy. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.
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: 2022 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032007, CA0955L9T032108, CA0143L9T032013, CA0143L9T032114, CA1303L9T032006, CA1303L9T032107, DHA-PRTS-NM-06-22, DHA-NM-03-22, DHA-NM-03-23, DHA-NM-08-23, DHA-NM-10-23 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. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 13 contractors totaling $1,661,410 under the Continuum of Care Program and six contractors totaling $253,310 under the Emergency Solutions Grant Program. We tested all contractors. Repeat Finding from Prior Years: No. 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. 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. 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: 2022 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032007, CA0955L9T032108, CA0143L9T032013, CA0143L9T032114, CA1303L9T032006, CA1303L9T032107, DHA-PRTS-NM-06-22, DHA-NM-03-22, DHA-NM-03-23, DHA-NM-08-23, DHA-NM-10-23 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. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 13 contractors totaling $1,661,410 under the Continuum of Care Program and six contractors totaling $253,310 under the Emergency Solutions Grant Program. We tested all contractors. Repeat Finding from Prior Years: No. 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. 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. 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: 2022 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032007, CA0955L9T032108, CA0143L9T032013, CA0143L9T032114, CA1303L9T032006, CA1303L9T032107, DHA-PRTS-NM-06-22, DHA-NM-03-22, DHA-NM-03-23, DHA-NM-08-23, DHA-NM-10-23 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. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 13 contractors totaling $1,661,410 under the Continuum of Care Program and six contractors totaling $253,310 under the Emergency Solutions Grant Program. We tested all contractors. Repeat Finding from Prior Years: No. 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. 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. 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: 2022 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032007, CA0955L9T032108, CA0143L9T032013, CA0143L9T032114, CA1303L9T032006, CA1303L9T032107, DHA-PRTS-NM-06-22, DHA-NM-03-22, DHA-NM-03-23, DHA-NM-08-23, DHA-NM-10-23 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. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 13 contractors totaling $1,661,410 under the Continuum of Care Program and six contractors totaling $253,310 under the Emergency Solutions Grant Program. We tested all contractors. Repeat Finding from Prior Years: No. 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. 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. 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: 2022 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032007, CA0955L9T032108, CA0143L9T032013, CA0143L9T032114, CA1303L9T032006, CA1303L9T032107, DHA-PRTS-NM-06-22, DHA-NM-03-22, DHA-NM-03-23, DHA-NM-08-23, DHA-NM-10-23 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. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 13 contractors totaling $1,661,410 under the Continuum of Care Program and six contractors totaling $253,310 under the Emergency Solutions Grant Program. We tested all contractors. Repeat Finding from Prior Years: No. 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. 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. 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: 2022 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032007, CA0955L9T032108, CA0143L9T032013, CA0143L9T032114, CA1303L9T032006, CA1303L9T032107, DHA-PRTS-NM-06-22, DHA-NM-03-22, DHA-NM-03-23, DHA-NM-08-23, DHA-NM-10-23 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. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 13 contractors totaling $1,661,410 under the Continuum of Care Program and six contractors totaling $253,310 under the Emergency Solutions Grant Program. We tested all contractors. Repeat Finding from Prior Years: No. 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. 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. 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: 2022 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032007, CA0955L9T032108, CA0143L9T032013, CA0143L9T032114, CA1303L9T032006, CA1303L9T032107, DHA-PRTS-NM-06-22, DHA-NM-03-22, DHA-NM-03-23, DHA-NM-08-23, DHA-NM-10-23 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. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 13 contractors totaling $1,661,410 under the Continuum of Care Program and six contractors totaling $253,310 under the Emergency Solutions Grant Program. We tested all contractors. Repeat Finding from Prior Years: No. 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. 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. 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: 2022 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032007, CA0955L9T032108, CA0143L9T032013, CA0143L9T032114, CA1303L9T032006, CA1303L9T032107, DHA-PRTS-NM-06-22, DHA-NM-03-22, DHA-NM-03-23, DHA-NM-08-23, DHA-NM-10-23 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. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 13 contractors totaling $1,661,410 under the Continuum of Care Program and six contractors totaling $253,310 under the Emergency Solutions Grant Program. We tested all contractors. Repeat Finding from Prior Years: No. 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. 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. 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: 2022 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032007, CA0955L9T032108, CA0143L9T032013, CA0143L9T032114, CA1303L9T032006, CA1303L9T032107, DHA-PRTS-NM-06-22, DHA-NM-03-22, DHA-NM-03-23, DHA-NM-08-23, DHA-NM-10-23 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. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 13 contractors totaling $1,661,410 under the Continuum of Care Program and six contractors totaling $253,310 under the Emergency Solutions Grant Program. We tested all contractors. Repeat Finding from Prior Years: No. 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. 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. 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: 2022 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032007, CA0955L9T032108, CA0143L9T032013, CA0143L9T032114, CA1303L9T032006, CA1303L9T032107, DHA-PRTS-NM-06-22, DHA-NM-03-22, DHA-NM-03-23, DHA-NM-08-23, DHA-NM-10-23 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. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 13 contractors totaling $1,661,410 under the Continuum of Care Program and six contractors totaling $253,310 under the Emergency Solutions Grant Program. We tested all contractors. Repeat Finding from Prior Years: No. 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. 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. 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: 2022 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032007, CA0955L9T032108, CA0143L9T032013, CA0143L9T032114, CA1303L9T032006, CA1303L9T032107, DHA-PRTS-NM-06-22, DHA-NM-03-22, DHA-NM-03-23, DHA-NM-08-23, DHA-NM-10-23 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. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 13 contractors totaling $1,661,410 under the Continuum of Care Program and six contractors totaling $253,310 under the Emergency Solutions Grant Program. We tested all contractors. Repeat Finding from Prior Years: No. 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. 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. 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: 2022 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032007, CA0955L9T032108, CA0143L9T032013, CA0143L9T032114, CA1303L9T032006, CA1303L9T032107, DHA-PRTS-NM-06-22, DHA-NM-03-22, DHA-NM-03-23, DHA-NM-08-23, DHA-NM-10-23 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. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 13 contractors totaling $1,661,410 under the Continuum of Care Program and six contractors totaling $253,310 under the Emergency Solutions Grant Program. We tested all contractors. Repeat Finding from Prior Years: No. 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. 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. 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.
Finding 2022-007 – Procurement US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the stormwater project totaling $1,783,033 for the year ended December 31, 2022 followed formal procurement procedures. The stormwater contract exceeds the Uniform Guidance formal procurement methods. In addition, in accordance with the Uniform Guidance, a purchase price from the Commonwealth of Pennsylvania COSTARS cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the dollar amount of the purchase. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat Finding: Yes Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows Uniform Guidance procurement standards. View of Responsible Official: The City agrees. See the corrective action plan.
Finding 2022-007 – Procurement US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the stormwater project totaling $1,783,033 for the year ended December 31, 2022 followed formal procurement procedures. The stormwater contract exceeds the Uniform Guidance formal procurement methods. In addition, in accordance with the Uniform Guidance, a purchase price from the Commonwealth of Pennsylvania COSTARS cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the dollar amount of the purchase. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat Finding: Yes Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows Uniform Guidance procurement standards. View of Responsible Official: The City agrees. See the corrective action plan.
FINDING 2022-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): IN0429, SWIF221472 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 13CITY OF SCOTTSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Procurement - Policy Non-federal entities must follow procurement standards set out in the Code of Federal Regulations (CFR) in addition to 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 idented in 2 CFR Part 200. The City did not have its own documented procurement procedures or policies that reflected applicable state laws and regulations or federal statutes for procuring goods and services paid with federal funds. Procurement Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Two vendors were identified with total purchases that fell within the small purchase threshold. Price or rate quotes were not obtained, nor was full and open competition provided for either vendor. Additionally, there was no documentation available to support the rationale to limit competition. Simplified Acquisition Threshold When the value of the procurement for property or services exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a non-federal entity, formal procurement methods are required. The SAT is typically set at $250,000; however, Indiana Code 5-22-8 has a more restrictive threshold, and, therefore, the SAT is set at $150,000. Formal procurement methods require adherence to documented procedures and formal methods such as sealed bids or proposals. Under the formal proposal method, the non-federal entity may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby offeror's qualifications are evaluated, and the most qualified offeror is selected, subject to negotiation of fair and reasonable compensation. The method, where prices are not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms that are a potential source to perform the proposed effort. INDIANA STATE BOARD OF ACCOUNTS 14CITY OF SCOTTSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Five vendors were identified with total purchases that fell within the SAT. One of the five vendors tested, which was for A/E professional services, did not have contract files, including sealed bids or proposals, to document the history of procurement, selection of contract type, or the basis for the contract. Additionally, there was no documentation available to support the rationale to limit competition nor was a cost or price analysis performed in connection with procurement. Conflict of Interest Policy Although conflicts of interest were addressed in the City's Employee Policy and Procedure Manual (manual), the manual did not include standards of conduct covering conflicts of interest nor govern the actions of its employees engaged in selection, award, and administration of contracts supported by federal awards. Suspension and Debarment Prior to entering into subawards and covered transactions with the State and Local Fiscal Recovery Funds (SLFRF) award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a non-procurement 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. The City did not have any policies or procedures in place related to the SLFRF suspension and debarment requirements. A population of four covered transactions, totaling $1,507,088, that equaled or exceeded $25,000 paid from the SLFRF funds were identified. All four covered transactions were selected for testing. For each of the four transactions, the City did not verify the vendors' suspension or debarment status prior to payment due to the City not having any policies or procedures in place to verify that contractors were neither suspended nor debarred, or otherwise excluded or disqualified, from participating in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 15CITY OF SCOTTSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (c) (1) The non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with ? 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the nonFederal entity determines to be appropriate: INDIANA STATE BOARD OF ACCOUNTS 16CITY OF SCOTTSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. (i) In order for sealed bidding to be feasible, the following conditions should be present: (A) A complete, adequate, and realistic specification or purchase description is available; (B) Two or more responsible bidders are willing and able to compete effectively for the business; and (C) The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price. (ii) If sealed bids are used, the following requirements apply: (A) Bids must be solicited from an adequate number of qualified sources, providing them sufficient response time prior to the date set for opening the bids, for local, and tribal governments, the invitation for bids must be publicly advertised; (B) The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond; (C) All bids will be opened at the time and place prescribed in the invitation for bids, and for local and tribal governments, the bids must be opened publicly; (D) A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and (E) Any or all bids may be rejected if there is a sound documented reason. (2) Proposals. A procurement method in which either a fixed price or costreimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. They are awarded in accordance with the following requirements: (i) Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Proposals must be solicited from an adequate number of qualified offerors. Any response to publicized requests for proposals must be considered to the maximum extent practical; (ii) The non-Federal entity must have a written method for conducting technical evaluations of the proposals received and making selections; INDIANA STATE BOARD OF ACCOUNTS 17CITY OF SCOTTSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) Contracts must be awarded to the responsible offeror whose proposal is most advantageous to the non-Federal entity, with price and other factors considered; and (iv) The non-Federal entity may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby offeror's qualifications are evaluated and the most qualified offeror is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms that are a potential source to perform the proposed effort. . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls over procurement and suspension and debarment was not implemented by the management of the City to ensure that goods and services were properly procured and that vendors to whom payment equaled or exceeded $25,000 were not suspended or debarred. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City's management statements of what should be done to effect internal controls and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, property and services were not properly procured and vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned cost identified. Recommendations We recommended that management of the City establish a proper system of internal controls and develop procedures to ensure that property and services are properly procured and that contractors are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. INDIANA STATE BOARD OF ACCOUNTS 18CITY OF SCOTTSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the view of the responsible officials, refer to the Corrective Action plan that is part of this report.
FINDING 2022-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): IN0429, SWIF221472 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 13CITY OF SCOTTSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Procurement - Policy Non-federal entities must follow procurement standards set out in the Code of Federal Regulations (CFR) in addition to 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 idented in 2 CFR Part 200. The City did not have its own documented procurement procedures or policies that reflected applicable state laws and regulations or federal statutes for procuring goods and services paid with federal funds. Procurement Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Two vendors were identified with total purchases that fell within the small purchase threshold. Price or rate quotes were not obtained, nor was full and open competition provided for either vendor. Additionally, there was no documentation available to support the rationale to limit competition. Simplified Acquisition Threshold When the value of the procurement for property or services exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a non-federal entity, formal procurement methods are required. The SAT is typically set at $250,000; however, Indiana Code 5-22-8 has a more restrictive threshold, and, therefore, the SAT is set at $150,000. Formal procurement methods require adherence to documented procedures and formal methods such as sealed bids or proposals. Under the formal proposal method, the non-federal entity may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby offeror's qualifications are evaluated, and the most qualified offeror is selected, subject to negotiation of fair and reasonable compensation. The method, where prices are not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms that are a potential source to perform the proposed effort. INDIANA STATE BOARD OF ACCOUNTS 14CITY OF SCOTTSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Five vendors were identified with total purchases that fell within the SAT. One of the five vendors tested, which was for A/E professional services, did not have contract files, including sealed bids or proposals, to document the history of procurement, selection of contract type, or the basis for the contract. Additionally, there was no documentation available to support the rationale to limit competition nor was a cost or price analysis performed in connection with procurement. Conflict of Interest Policy Although conflicts of interest were addressed in the City's Employee Policy and Procedure Manual (manual), the manual did not include standards of conduct covering conflicts of interest nor govern the actions of its employees engaged in selection, award, and administration of contracts supported by federal awards. Suspension and Debarment Prior to entering into subawards and covered transactions with the State and Local Fiscal Recovery Funds (SLFRF) award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a non-procurement 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. The City did not have any policies or procedures in place related to the SLFRF suspension and debarment requirements. A population of four covered transactions, totaling $1,507,088, that equaled or exceeded $25,000 paid from the SLFRF funds were identified. All four covered transactions were selected for testing. For each of the four transactions, the City did not verify the vendors' suspension or debarment status prior to payment due to the City not having any policies or procedures in place to verify that contractors were neither suspended nor debarred, or otherwise excluded or disqualified, from participating in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 15CITY OF SCOTTSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (c) (1) The non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with ? 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the nonFederal entity determines to be appropriate: INDIANA STATE BOARD OF ACCOUNTS 16CITY OF SCOTTSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. (i) In order for sealed bidding to be feasible, the following conditions should be present: (A) A complete, adequate, and realistic specification or purchase description is available; (B) Two or more responsible bidders are willing and able to compete effectively for the business; and (C) The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price. (ii) If sealed bids are used, the following requirements apply: (A) Bids must be solicited from an adequate number of qualified sources, providing them sufficient response time prior to the date set for opening the bids, for local, and tribal governments, the invitation for bids must be publicly advertised; (B) The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond; (C) All bids will be opened at the time and place prescribed in the invitation for bids, and for local and tribal governments, the bids must be opened publicly; (D) A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and (E) Any or all bids may be rejected if there is a sound documented reason. (2) Proposals. A procurement method in which either a fixed price or costreimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. They are awarded in accordance with the following requirements: (i) Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Proposals must be solicited from an adequate number of qualified offerors. Any response to publicized requests for proposals must be considered to the maximum extent practical; (ii) The non-Federal entity must have a written method for conducting technical evaluations of the proposals received and making selections; INDIANA STATE BOARD OF ACCOUNTS 17CITY OF SCOTTSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) Contracts must be awarded to the responsible offeror whose proposal is most advantageous to the non-Federal entity, with price and other factors considered; and (iv) The non-Federal entity may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby offeror's qualifications are evaluated and the most qualified offeror is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms that are a potential source to perform the proposed effort. . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls over procurement and suspension and debarment was not implemented by the management of the City to ensure that goods and services were properly procured and that vendors to whom payment equaled or exceeded $25,000 were not suspended or debarred. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City's management statements of what should be done to effect internal controls and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, property and services were not properly procured and vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned cost identified. Recommendations We recommended that management of the City establish a proper system of internal controls and develop procedures to ensure that property and services are properly procured and that contractors are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. INDIANA STATE BOARD OF ACCOUNTS 18CITY OF SCOTTSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the view of the responsible officials, refer to the Corrective Action plan that is part of this report.
Criteria: The Corporation must maintain and adhere to documented procurement procedures that must conform to the procurement standards in 2 CFR Sections 200.317 through 200.327. These sections include policies and procedures related to competition, informal and formal procurement methods and noncompetitive procurement. Additionally, in accordance with 2 CFR Section 200.214, the Corporation must verify that vendors are not suspended or debarred from participating in Federal funds. Condition: We noted that there was a lack of evidence that policies and procedures were applied as required under the noted 2 CFR Sections in “Criteria”. Cause: The Corporation did not maintain formal documentation or evidence to support that a competitive price analysis for vendors or that suspension and debarment verifications were performed for vendors, as required by the general procurement standards of the Uniform Guidance. Effect or Potential Effect: We were unable to determine whether charges relating to vendor services or goods charged to the Federal programs are in accordance with 2 CFR Sections 200.317 through 200.327 or 200.214. Questioned costs: None Context: The Corporation was unable to provide evidence of procurement, suspension or debarment verification performed for walkthrough purposes or any samples that would be selected. Additionally, per management, no written documentation can be provided for any sole source procurements. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2021-010 in the 2021 report. Recommendation: We recommend the Corporation establish formal internal controls, and documentation of their performance, relating procurement, required price analysis of vendors, and suspension and debarment verifications. View of Responsible Officials: Due to turnover of several key financial executives and personnel and lack of formal documentation of current policies and procedures, the Corporation was unable to provide evidence of procurement, suspension or debarment verification performed as of December 31, 2022.
Criteria: The Corporation must maintain and adhere to documented procurement procedures that must conform to the procurement standards in 2 CFR Sections 200.317 through 200.327. These sections include policies and procedures related to competition, informal and formal procurement methods and noncompetitive procurement. Additionally, in accordance with 2 CFR Section 200.214, the Corporation must verify that vendors are not suspended or debarred from participating in Federal funds. Condition: We noted that there was a lack of evidence that policies and procedures were applied as required under the noted 2 CFR Sections in “Criteria”. Cause: The Corporation did not maintain formal documentation or evidence to support that a competitive price analysis for vendors or that suspension and debarment verifications were performed for vendors, as required by the general procurement standards of the Uniform Guidance. Effect or Potential Effect: We were unable to determine whether charges relating to vendor services or goods charged to the Federal programs are in accordance with 2 CFR Sections 200.317 through 200.327 or 200.214. Questioned costs: None Context: The Corporation was unable to provide evidence of procurement, suspension or debarment verification performed for walkthrough purposes or any samples that would be selected. Additionally, per management, no written documentation can be provided for any sole source procurements. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2021-010 in the 2021 report. Recommendation: We recommend the Corporation establish formal internal controls, and documentation of their performance, relating procurement, required price analysis of vendors, and suspension and debarment verifications. View of Responsible Officials: Due to turnover of several key financial executives and personnel and lack of formal documentation of current policies and procedures, the Corporation was unable to provide evidence of procurement, suspension or debarment verification performed as of December 31, 2022.
Criteria: The Corporation must maintain and adhere to documented procurement procedures that must conform to the procurement standards in 2 CFR Sections 200.317 through 200.327. These sections include policies and procedures related to competition, informal and formal procurement methods and noncompetitive procurement. Additionally, in accordance with 2 CFR Section 200.214, the Corporation must verify that vendors are not suspended or debarred from participating in Federal funds. Condition: We noted that there was a lack of evidence that policies and procedures were applied as required under the noted 2 CFR Sections in “Criteria”. Cause: The Corporation did not maintain formal documentation or evidence to support that a competitive price analysis for vendors or that suspension and debarment verifications were performed for vendors, as required by the general procurement standards of the Uniform Guidance. Effect or Potential Effect: We were unable to determine whether charges relating to vendor services or goods charged to the Federal programs are in accordance with 2 CFR Sections 200.317 through 200.327 or 200.214. Questioned costs: None Context: The Corporation was unable to provide evidence of procurement, suspension or debarment verification performed for walkthrough purposes or any samples that would be selected. Additionally, per management, no written documentation can be provided for any sole source procurements. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2021-010 in the 2021 report. Recommendation: We recommend the Corporation establish formal internal controls, and documentation of their performance, relating procurement, required price analysis of vendors, and suspension and debarment verifications. View of Responsible Officials: Due to turnover of several key financial executives and personnel and lack of formal documentation of current policies and procedures, the Corporation was unable to provide evidence of procurement, suspension or debarment verification performed as of December 31, 2022.
Finding 2022-002: 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 the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development 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 2022. 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.
Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development 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 2022. 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.
Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development 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 2022. 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.
Assistance Listing, Federal Agency, and Program Name 93.224, 93.527; COVID 19: Health Center Program Cluster Federal Award Identification Number and Year H80CS24134, H8ECS37956, H8FCS40356, and H8GCS48255 2022 Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria In accordance with 2 CFR sections 200.318 200.326, the Organization must maintain and use documented procedures for procurement transactions that are consistent with State, local, and tribal laws and regulations and the standards identified in CFR sections 200.317 through 200.327. The Organization must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Additionally, in accorance with 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209 6, the Organization must verify that the person with whom you intend to do business is not excluded or disqualified. Condition Policies and procedures in place over procurement, suspension, and debarment are not in conformance with Uniform Guidance. Additionally, the Organization did not procure in accordance with the regulations, including maintaining records sufficient to detail the history of each procurement transaction nor did they comply with suspension and debarement rules. Questioned Costs $1,121,985 Identification of How Questioned Costs Were Computed Questioned costs resulted from the Organization not maintaining or using the required procurement procedures over non payroll expenditures. Total non payroll expenditures included on the SEFA total $1,121,985. Context For all four contracts selected for testing, there were no records manintained to support procurement method, contract selection, or verification the entity was not suspended or disbared. Upon further procedures, we identified that the Organization did not follow any procurement guidelines in procuring all non payroll transactions. Cause and Effect There are no procurement, suspension, and debarement policies in place. As a result, no procedures are being completed over these compliance categories and thus the Organization did not comply with the related compliance requirements. Recommendation We recommend the Organization implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance and follow those policies. Views of Responsible Officials and Planned Corrective Actions The Organization will implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance.
Assistance Listing, Federal Agency, and Program Name 93.224, 93.527; COVID 19: Health Center Program Cluster Federal Award Identification Number and Year H80CS24134, H8ECS37956, H8FCS40356, and H8GCS48255 2022 Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria In accordance with 2 CFR sections 200.318 200.326, the Organization must maintain and use documented procedures for procurement transactions that are consistent with State, local, and tribal laws and regulations and the standards identified in CFR sections 200.317 through 200.327. The Organization must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Additionally, in accorance with 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209 6, the Organization must verify that the person with whom you intend to do business is not excluded or disqualified. Condition Policies and procedures in place over procurement, suspension, and debarment are not in conformance with Uniform Guidance. Additionally, the Organization did not procure in accordance with the regulations, including maintaining records sufficient to detail the history of each procurement transaction nor did they comply with suspension and debarement rules. Questioned Costs $1,121,985 Identification of How Questioned Costs Were Computed Questioned costs resulted from the Organization not maintaining or using the required procurement procedures over non payroll expenditures. Total non payroll expenditures included on the SEFA total $1,121,985. Context For all four contracts selected for testing, there were no records manintained to support procurement method, contract selection, or verification the entity was not suspended or disbared. Upon further procedures, we identified that the Organization did not follow any procurement guidelines in procuring all non payroll transactions. Cause and Effect There are no procurement, suspension, and debarement policies in place. As a result, no procedures are being completed over these compliance categories and thus the Organization did not comply with the related compliance requirements. Recommendation We recommend the Organization implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance and follow those policies. Views of Responsible Officials and Planned Corrective Actions The Organization will implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance.
Assistance Listing, Federal Agency, and Program Name 93.224, 93.527; COVID 19: Health Center Program Cluster Federal Award Identification Number and Year H80CS24134, H8ECS37956, H8FCS40356, and H8GCS48255 2022 Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria In accordance with 2 CFR sections 200.318 200.326, the Organization must maintain and use documented procedures for procurement transactions that are consistent with State, local, and tribal laws and regulations and the standards identified in CFR sections 200.317 through 200.327. The Organization must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Additionally, in accorance with 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209 6, the Organization must verify that the person with whom you intend to do business is not excluded or disqualified. Condition Policies and procedures in place over procurement, suspension, and debarment are not in conformance with Uniform Guidance. Additionally, the Organization did not procure in accordance with the regulations, including maintaining records sufficient to detail the history of each procurement transaction nor did they comply with suspension and debarement rules. Questioned Costs $1,121,985 Identification of How Questioned Costs Were Computed Questioned costs resulted from the Organization not maintaining or using the required procurement procedures over non payroll expenditures. Total non payroll expenditures included on the SEFA total $1,121,985. Context For all four contracts selected for testing, there were no records manintained to support procurement method, contract selection, or verification the entity was not suspended or disbared. Upon further procedures, we identified that the Organization did not follow any procurement guidelines in procuring all non payroll transactions. Cause and Effect There are no procurement, suspension, and debarement policies in place. As a result, no procedures are being completed over these compliance categories and thus the Organization did not comply with the related compliance requirements. Recommendation We recommend the Organization implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance and follow those policies. Views of Responsible Officials and Planned Corrective Actions The Organization will implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance.
Assistance Listing, Federal Agency, and Program Name 93.224, 93.527; COVID 19: Health Center Program Cluster Federal Award Identification Number and Year H80CS24134, H8ECS37956, H8FCS40356, and H8GCS48255 2022 Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria In accordance with 2 CFR sections 200.318 200.326, the Organization must maintain and use documented procedures for procurement transactions that are consistent with State, local, and tribal laws and regulations and the standards identified in CFR sections 200.317 through 200.327. The Organization must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Additionally, in accorance with 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209 6, the Organization must verify that the person with whom you intend to do business is not excluded or disqualified. Condition Policies and procedures in place over procurement, suspension, and debarment are not in conformance with Uniform Guidance. Additionally, the Organization did not procure in accordance with the regulations, including maintaining records sufficient to detail the history of each procurement transaction nor did they comply with suspension and debarement rules. Questioned Costs $1,121,985 Identification of How Questioned Costs Were Computed Questioned costs resulted from the Organization not maintaining or using the required procurement procedures over non payroll expenditures. Total non payroll expenditures included on the SEFA total $1,121,985. Context For all four contracts selected for testing, there were no records manintained to support procurement method, contract selection, or verification the entity was not suspended or disbared. Upon further procedures, we identified that the Organization did not follow any procurement guidelines in procuring all non payroll transactions. Cause and Effect There are no procurement, suspension, and debarement policies in place. As a result, no procedures are being completed over these compliance categories and thus the Organization did not comply with the related compliance requirements. Recommendation We recommend the Organization implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance and follow those policies. Views of Responsible Officials and Planned Corrective Actions The Organization will implement written policies and procedures over procurement, suspension, and debarement that conform with Uniform Guidance.
Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR 200.317 - 200.327. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-Federal entity must: 1. Meet the general procurement standards in 2 CFR 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR 200.320(a)(1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable (2 CFR 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-Federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR 200.320(b); the competitive proposals method under the conditions specified in 2 CFR 200.320(b)(2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” Although the Village contracted with a consultant to assist the Village with compliance with various procurement compliance requirements, the Village does not have any formal policies in place regarding procurement requirements. We recommend that the Village adopt formal policies and procedures that address procurement requirements.
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: 2022-021 Compliance with Financial and Performance Reporting Fiscal year finding initially occurred: 2021 CDBG ? Entitlement Grants Cluster (14.218) B-16-MC-22-0003, B-17-MC-22-0003, B-18-MC-22-0003, B-19-MC-22-0003, B-20-MC-22-0003, B-21-MC-22-0003, B-22-MC-22-0003 Criteria Pursuant to Part 4 CDBG ? Entitlement Grants Cluster and financial and performance reporting requirements in the cooperative agreement provisions, and 2 CFR 200.327. Integrated Disbursement and Information System (IDIS) (OMB No. 2506-0077) ? Grantees may include reports generated by IDIS as part of their annual performance and evaluation report that must be submitted for the CDBG Entitlement program 90 days after the end of a grantee?s program year. Auditor?s are only expected to test information extracted from IDIS in the following system-generated reports: (1) C04PR03 ? Activity Summary Report, (2) C04PR26 ? CDBG Financial Summary Report, (3) C04PR26 ? CDBG-CV Financial Summary Report, (4) C04PR26 ? CDBG Activity Summary by Selected Grant. Condition Instance of Non-Compliance ? While the CDBG Financial Summary Report (C04PR26) was submitted timely, the report included materially inaccurate information on line 30, Adjustment to Compute Total PS Obligations. The amount reported was overstated by $48,812. Cause The Government has not corrected the error in the reporting to the U.S. Department of Housing and Urban Development. Effect Noncompliance with financial reporting requirements. Recommendation We recommend the Government review its procedures over reporting to ensure that all required reporting information is reviewed and reconciled for accuracy to the Government?s financial records. Views of Responsible Officials and Planned Corrective Action The finding was a result of a clerical error. The Government is allowed to utilize up to 15% of its annual CDBG allocation for Public Services. The adjustment made was to correct the reported actual use from 2% to 5%. Corrective actions are being implemented to ensure data entered into the report is accurate prior to submission to HUD. This project is expected to be completed within three months and will be overseen by Community Development & Planning Director Mary Sliman.
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: 2022-026 Compliance with Financial and Performance Reporting Fiscal year finding initially occurred: 2021 CDBG ? Entitlement Grants Cluster (14.218) B-16-MC-22-0003, B-17-MC-22-0003, B-18-MC-22-0003, B-19-MC-22-0003, B-20-MC-22-0003, B-21-MC-22-0003, B-22-MC-22-0003 See Compliance Finding 2022-021. 2022-021 Compliance with Financial and Performance Reporting Fiscal year finding initially occurred: 2021 CDBG ? Entitlement Grants Cluster (14.218) B-16-MC-22-0003, B-17-MC-22-0003, B-18-MC-22-0003, B-19-MC-22-0003, B-20-MC-22-0003, B-21-MC-22-0003, B-22-MC-22-0003 Criteria Pursuant to Part 4 CDBG ? Entitlement Grants Cluster and financial and performance reporting requirements in the cooperative agreement provisions, and 2 CFR 200.327. Integrated Disbursement and Information System (IDIS) (OMB No. 2506-0077) ? Grantees may include reports generated by IDIS as part of their annual performance and evaluation report that must be submitted for the CDBG Entitlement program 90 days after the end of a grantee?s program year. Auditor?s are only expected to test information extracted from IDIS in the following system-generated reports: (1) C04PR03 ? Activity Summary Report, (2) C04PR26 ? CDBG Financial Summary Report, (3) C04PR26 ? CDBG-CV Financial Summary Report, (4) C04PR26 ? CDBG Activity Summary by Selected Grant. Condition Instance of Non-Compliance ? While the CDBG Financial Summary Report (C04PR26) was submitted timely, the report included materially inaccurate information on line 30, Adjustment to Compute Total PS Obligations. The amount reported was overstated by $48,812. Cause The Government has not corrected the error in the reporting to the U.S. Department of Housing and Urban Development. Effect Noncompliance with financial reporting requirements. Recommendation We recommend the Government review its procedures over reporting to ensure that all required reporting information is reviewed and reconciled for accuracy to the Government?s financial records. Views of Responsible Officials and Planned Corrective Action The finding was a result of a clerical error. The Government is allowed to utilize up to 15% of its annual CDBG allocation for Public Services. The adjustment made was to correct the reported actual use from 2% to 5%. Corrective actions are being implemented to ensure data entered into the report is accurate prior to submission to HUD. This project is expected to be completed within three months and will be overseen by Community Development & Planning Director Mary Sliman.
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: 2022-021 Compliance with Financial and Performance Reporting Fiscal year finding initially occurred: 2021 CDBG ? Entitlement Grants Cluster (14.218) B-16-MC-22-0003, B-17-MC-22-0003, B-18-MC-22-0003, B-19-MC-22-0003, B-20-MC-22-0003, B-21-MC-22-0003, B-22-MC-22-0003 Criteria Pursuant to Part 4 CDBG ? Entitlement Grants Cluster and financial and performance reporting requirements in the cooperative agreement provisions, and 2 CFR 200.327. Integrated Disbursement and Information System (IDIS) (OMB No. 2506-0077) ? Grantees may include reports generated by IDIS as part of their annual performance and evaluation report that must be submitted for the CDBG Entitlement program 90 days after the end of a grantee?s program year. Auditor?s are only expected to test information extracted from IDIS in the following system-generated reports: (1) C04PR03 ? Activity Summary Report, (2) C04PR26 ? CDBG Financial Summary Report, (3) C04PR26 ? CDBG-CV Financial Summary Report, (4) C04PR26 ? CDBG Activity Summary by Selected Grant. Condition Instance of Non-Compliance ? While the CDBG Financial Summary Report (C04PR26) was submitted timely, the report included materially inaccurate information on line 30, Adjustment to Compute Total PS Obligations. The amount reported was overstated by $48,812. Cause The Government has not corrected the error in the reporting to the U.S. Department of Housing and Urban Development. Effect Noncompliance with financial reporting requirements. Recommendation We recommend the Government review its procedures over reporting to ensure that all required reporting information is reviewed and reconciled for accuracy to the Government?s financial records. Views of Responsible Officials and Planned Corrective Action The finding was a result of a clerical error. The Government is allowed to utilize up to 15% of its annual CDBG allocation for Public Services. The adjustment made was to correct the reported actual use from 2% to 5%. Corrective actions are being implemented to ensure data entered into the report is accurate prior to submission to HUD. This project is expected to be completed within three months and will be overseen by Community Development & Planning Director Mary Sliman.
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: 2022-026 Compliance with Financial and Performance Reporting Fiscal year finding initially occurred: 2021 CDBG ? Entitlement Grants Cluster (14.218) B-16-MC-22-0003, B-17-MC-22-0003, B-18-MC-22-0003, B-19-MC-22-0003, B-20-MC-22-0003, B-21-MC-22-0003, B-22-MC-22-0003 See Compliance Finding 2022-021. 2022-021 Compliance with Financial and Performance Reporting Fiscal year finding initially occurred: 2021 CDBG ? Entitlement Grants Cluster (14.218) B-16-MC-22-0003, B-17-MC-22-0003, B-18-MC-22-0003, B-19-MC-22-0003, B-20-MC-22-0003, B-21-MC-22-0003, B-22-MC-22-0003 Criteria Pursuant to Part 4 CDBG ? Entitlement Grants Cluster and financial and performance reporting requirements in the cooperative agreement provisions, and 2 CFR 200.327. Integrated Disbursement and Information System (IDIS) (OMB No. 2506-0077) ? Grantees may include reports generated by IDIS as part of their annual performance and evaluation report that must be submitted for the CDBG Entitlement program 90 days after the end of a grantee?s program year. Auditor?s are only expected to test information extracted from IDIS in the following system-generated reports: (1) C04PR03 ? Activity Summary Report, (2) C04PR26 ? CDBG Financial Summary Report, (3) C04PR26 ? CDBG-CV Financial Summary Report, (4) C04PR26 ? CDBG Activity Summary by Selected Grant. Condition Instance of Non-Compliance ? While the CDBG Financial Summary Report (C04PR26) was submitted timely, the report included materially inaccurate information on line 30, Adjustment to Compute Total PS Obligations. The amount reported was overstated by $48,812. Cause The Government has not corrected the error in the reporting to the U.S. Department of Housing and Urban Development. Effect Noncompliance with financial reporting requirements. Recommendation We recommend the Government review its procedures over reporting to ensure that all required reporting information is reviewed and reconciled for accuracy to the Government?s financial records. Views of Responsible Officials and Planned Corrective Action The finding was a result of a clerical error. The Government is allowed to utilize up to 15% of its annual CDBG allocation for Public Services. The adjustment made was to correct the reported actual use from 2% to 5%. Corrective actions are being implemented to ensure data entered into the report is accurate prior to submission to HUD. This project is expected to be completed within three months and will be overseen by Community Development & Planning Director Mary Sliman.
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: 2022-021 Compliance with Financial and Performance Reporting Fiscal year finding initially occurred: 2021 CDBG ? Entitlement Grants Cluster (14.218) B-16-MC-22-0003, B-17-MC-22-0003, B-18-MC-22-0003, B-19-MC-22-0003, B-20-MC-22-0003, B-21-MC-22-0003, B-22-MC-22-0003 Criteria Pursuant to Part 4 CDBG ? Entitlement Grants Cluster and financial and performance reporting requirements in the cooperative agreement provisions, and 2 CFR 200.327. Integrated Disbursement and Information System (IDIS) (OMB No. 2506-0077) ? Grantees may include reports generated by IDIS as part of their annual performance and evaluation report that must be submitted for the CDBG Entitlement program 90 days after the end of a grantee?s program year. Auditor?s are only expected to test information extracted from IDIS in the following system-generated reports: (1) C04PR03 ? Activity Summary Report, (2) C04PR26 ? CDBG Financial Summary Report, (3) C04PR26 ? CDBG-CV Financial Summary Report, (4) C04PR26 ? CDBG Activity Summary by Selected Grant. Condition Instance of Non-Compliance ? While the CDBG Financial Summary Report (C04PR26) was submitted timely, the report included materially inaccurate information on line 30, Adjustment to Compute Total PS Obligations. The amount reported was overstated by $48,812. Cause The Government has not corrected the error in the reporting to the U.S. Department of Housing and Urban Development. Effect Noncompliance with financial reporting requirements. Recommendation We recommend the Government review its procedures over reporting to ensure that all required reporting information is reviewed and reconciled for accuracy to the Government?s financial records. Views of Responsible Officials and Planned Corrective Action The finding was a result of a clerical error. The Government is allowed to utilize up to 15% of its annual CDBG allocation for Public Services. The adjustment made was to correct the reported actual use from 2% to 5%. Corrective actions are being implemented to ensure data entered into the report is accurate prior to submission to HUD. This project is expected to be completed within three months and will be overseen by Community Development & Planning Director Mary Sliman.
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: 2022-026 Compliance with Financial and Performance Reporting Fiscal year finding initially occurred: 2021 CDBG ? Entitlement Grants Cluster (14.218) B-16-MC-22-0003, B-17-MC-22-0003, B-18-MC-22-0003, B-19-MC-22-0003, B-20-MC-22-0003, B-21-MC-22-0003, B-22-MC-22-0003 See Compliance Finding 2022-021. 2022-021 Compliance with Financial and Performance Reporting Fiscal year finding initially occurred: 2021 CDBG ? Entitlement Grants Cluster (14.218) B-16-MC-22-0003, B-17-MC-22-0003, B-18-MC-22-0003, B-19-MC-22-0003, B-20-MC-22-0003, B-21-MC-22-0003, B-22-MC-22-0003 Criteria Pursuant to Part 4 CDBG ? Entitlement Grants Cluster and financial and performance reporting requirements in the cooperative agreement provisions, and 2 CFR 200.327. Integrated Disbursement and Information System (IDIS) (OMB No. 2506-0077) ? Grantees may include reports generated by IDIS as part of their annual performance and evaluation report that must be submitted for the CDBG Entitlement program 90 days after the end of a grantee?s program year. Auditor?s are only expected to test information extracted from IDIS in the following system-generated reports: (1) C04PR03 ? Activity Summary Report, (2) C04PR26 ? CDBG Financial Summary Report, (3) C04PR26 ? CDBG-CV Financial Summary Report, (4) C04PR26 ? CDBG Activity Summary by Selected Grant. Condition Instance of Non-Compliance ? While the CDBG Financial Summary Report (C04PR26) was submitted timely, the report included materially inaccurate information on line 30, Adjustment to Compute Total PS Obligations. The amount reported was overstated by $48,812. Cause The Government has not corrected the error in the reporting to the U.S. Department of Housing and Urban Development. Effect Noncompliance with financial reporting requirements. Recommendation We recommend the Government review its procedures over reporting to ensure that all required reporting information is reviewed and reconciled for accuracy to the Government?s financial records. Views of Responsible Officials and Planned Corrective Action The finding was a result of a clerical error. The Government is allowed to utilize up to 15% of its annual CDBG allocation for Public Services. The adjustment made was to correct the reported actual use from 2% to 5%. Corrective actions are being implemented to ensure data entered into the report is accurate prior to submission to HUD. This project is expected to be completed within three months and will be overseen by Community Development & Planning Director Mary Sliman.
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: 2022-021 Compliance with Financial and Performance Reporting Fiscal year finding initially occurred: 2021 CDBG ? Entitlement Grants Cluster (14.218) B-16-MC-22-0003, B-17-MC-22-0003, B-18-MC-22-0003, B-19-MC-22-0003, B-20-MC-22-0003, B-21-MC-22-0003, B-22-MC-22-0003 Criteria Pursuant to Part 4 CDBG ? Entitlement Grants Cluster and financial and performance reporting requirements in the cooperative agreement provisions, and 2 CFR 200.327. Integrated Disbursement and Information System (IDIS) (OMB No. 2506-0077) ? Grantees may include reports generated by IDIS as part of their annual performance and evaluation report that must be submitted for the CDBG Entitlement program 90 days after the end of a grantee?s program year. Auditor?s are only expected to test information extracted from IDIS in the following system-generated reports: (1) C04PR03 ? Activity Summary Report, (2) C04PR26 ? CDBG Financial Summary Report, (3) C04PR26 ? CDBG-CV Financial Summary Report, (4) C04PR26 ? CDBG Activity Summary by Selected Grant. Condition Instance of Non-Compliance ? While the CDBG Financial Summary Report (C04PR26) was submitted timely, the report included materially inaccurate information on line 30, Adjustment to Compute Total PS Obligations. The amount reported was overstated by $48,812. Cause The Government has not corrected the error in the reporting to the U.S. Department of Housing and Urban Development. Effect Noncompliance with financial reporting requirements. Recommendation We recommend the Government review its procedures over reporting to ensure that all required reporting information is reviewed and reconciled for accuracy to the Government?s financial records. Views of Responsible Officials and Planned Corrective Action The finding was a result of a clerical error. The Government is allowed to utilize up to 15% of its annual CDBG allocation for Public Services. The adjustment made was to correct the reported actual use from 2% to 5%. Corrective actions are being implemented to ensure data entered into the report is accurate prior to submission to HUD. This project is expected to be completed within three months and will be overseen by Community Development & Planning Director Mary Sliman.
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: 2022-026 Compliance with Financial and Performance Reporting Fiscal year finding initially occurred: 2021 CDBG ? Entitlement Grants Cluster (14.218) B-16-MC-22-0003, B-17-MC-22-0003, B-18-MC-22-0003, B-19-MC-22-0003, B-20-MC-22-0003, B-21-MC-22-0003, B-22-MC-22-0003 See Compliance Finding 2022-021. 2022-021 Compliance with Financial and Performance Reporting Fiscal year finding initially occurred: 2021 CDBG ? Entitlement Grants Cluster (14.218) B-16-MC-22-0003, B-17-MC-22-0003, B-18-MC-22-0003, B-19-MC-22-0003, B-20-MC-22-0003, B-21-MC-22-0003, B-22-MC-22-0003 Criteria Pursuant to Part 4 CDBG ? Entitlement Grants Cluster and financial and performance reporting requirements in the cooperative agreement provisions, and 2 CFR 200.327. Integrated Disbursement and Information System (IDIS) (OMB No. 2506-0077) ? Grantees may include reports generated by IDIS as part of their annual performance and evaluation report that must be submitted for the CDBG Entitlement program 90 days after the end of a grantee?s program year. Auditor?s are only expected to test information extracted from IDIS in the following system-generated reports: (1) C04PR03 ? Activity Summary Report, (2) C04PR26 ? CDBG Financial Summary Report, (3) C04PR26 ? CDBG-CV Financial Summary Report, (4) C04PR26 ? CDBG Activity Summary by Selected Grant. Condition Instance of Non-Compliance ? While the CDBG Financial Summary Report (C04PR26) was submitted timely, the report included materially inaccurate information on line 30, Adjustment to Compute Total PS Obligations. The amount reported was overstated by $48,812. Cause The Government has not corrected the error in the reporting to the U.S. Department of Housing and Urban Development. Effect Noncompliance with financial reporting requirements. Recommendation We recommend the Government review its procedures over reporting to ensure that all required reporting information is reviewed and reconciled for accuracy to the Government?s financial records. Views of Responsible Officials and Planned Corrective Action The finding was a result of a clerical error. The Government is allowed to utilize up to 15% of its annual CDBG allocation for Public Services. The adjustment made was to correct the reported actual use from 2% to 5%. Corrective actions are being implemented to ensure data entered into the report is accurate prior to submission to HUD. This project is expected to be completed within three months and will be overseen by Community Development & Planning Director Mary Sliman.
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: 2022-021 Compliance with Financial and Performance Reporting Fiscal year finding initially occurred: 2021 CDBG ? Entitlement Grants Cluster (14.218) B-16-MC-22-0003, B-17-MC-22-0003, B-18-MC-22-0003, B-19-MC-22-0003, B-20-MC-22-0003, B-21-MC-22-0003, B-22-MC-22-0003 Criteria Pursuant to Part 4 CDBG ? Entitlement Grants Cluster and financial and performance reporting requirements in the cooperative agreement provisions, and 2 CFR 200.327. Integrated Disbursement and Information System (IDIS) (OMB No. 2506-0077) ? Grantees may include reports generated by IDIS as part of their annual performance and evaluation report that must be submitted for the CDBG Entitlement program 90 days after the end of a grantee?s program year. Auditor?s are only expected to test information extracted from IDIS in the following system-generated reports: (1) C04PR03 ? Activity Summary Report, (2) C04PR26 ? CDBG Financial Summary Report, (3) C04PR26 ? CDBG-CV Financial Summary Report, (4) C04PR26 ? CDBG Activity Summary by Selected Grant. Condition Instance of Non-Compliance ? While the CDBG Financial Summary Report (C04PR26) was submitted timely, the report included materially inaccurate information on line 30, Adjustment to Compute Total PS Obligations. The amount reported was overstated by $48,812. Cause The Government has not corrected the error in the reporting to the U.S. Department of Housing and Urban Development. Effect Noncompliance with financial reporting requirements. Recommendation We recommend the Government review its procedures over reporting to ensure that all required reporting information is reviewed and reconciled for accuracy to the Government?s financial records. Views of Responsible Officials and Planned Corrective Action The finding was a result of a clerical error. The Government is allowed to utilize up to 15% of its annual CDBG allocation for Public Services. The adjustment made was to correct the reported actual use from 2% to 5%. Corrective actions are being implemented to ensure data entered into the report is accurate prior to submission to HUD. This project is expected to be completed within three months and will be overseen by Community Development & Planning Director Mary Sliman.