Finding 10087 (2023-002)

Federal Agency: US Department of Education Federal Program Name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A220064, H173A220070 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number(s): 2023-052289-DPI-FLOW-341, 2023-052289-DPI-WCCA-342, Unknown, 2023-052289-DPI-PRESCH-347 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria or Specific Requirement: 2 CFR Section 320.318(i) requires the District to 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. CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The District has a policy to maintain documentation of the procurement process for any transaction, and to verify suspension and debarment status for the transactions over $25,000 related to federal grants but they have not implemented formal internal controls to ensure that they did follow the procurement policy and check suspension and debarment. Questioned Costs: None Context: The District did not maintain documentation for the reasoning that two of the seven procurement transactions in our sample (repeat contracts) were designated as a sole source. The District did not verify suspension and debarment for two of the five vendors (with repeat contracts) prior to signing the contract applicable for the current year. Cause: The District does not maintain a listing of the repeat contracts to determine if it they are currently within the term of the original contract, have an addendum to the length of term on the original contract, or are in new procurement for the same product from a vendor that was previously designated as a sole source. Therefore, the District could not easily provide a listing of procurements that are applicable to the current year, provide documentation of the reasons to utilize these vendors and since they were long term vendors, the District was not aware they needed to be rechecked for suspension and debarment every time a new contract was entered into. Additionally, individual invoices under these repeat contracts do not require a purchase order. Therefore, they did not go through the procurement department to verify the procurement process was performed and properly documented, and the suspension and debarment was included on the contract. Effect: Procurement transactions may not be in compliance with the Uniform Guidance. The District could contract with a vendor that has been suspended or debarred from receiving federal funds. Repeat Finding: No. Recommendation: We recommend that the District review its Uniform Guidance policies with all staff to ensure procurement requirements are understood and implement controls to help ensure the proper procurement method was followed and procurement history is documented. We also recommend the District review and update policies and procedures over review of certain transactions to ensure that all federal grants with covered transactions have vendors reviewed for suspension and debarment status. View of Responsible Officials: There is no disagreement with the audit finding.