Finding Text
2024-003: Procurement
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 10.760, U. S Department of Agriculture - Water and waste disposal systems for rural communities
Federal Award Identification Number and Year: RD Loan 92-12 Loan Period 9/6/23 - 9/1/2063, RD Loan 10 Loan and RD Loan 13 Loan period 1/1/24 - 1/1/2064
Type: Material weakness in internal control and material noncompliance with laws and regulations
Repeat Finding: No
Criteria: Per 2 CFR 200.318 (a), the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. In addition, per 2 CFR 200.318(i), the non-Federal entity must maintain records sufficient to detail the history of procurement.
Condition: The Village did not utilize federal procurement requirements cited above for the engineering services for the Water and Sewer Fund project.
Identification of How Likely Questioned Costs Were Computed: The questioned costs were determined from actual engineering design and construction cost billed (federal portion) during the July 6, 2018 through June 30, 2024 period as summarized from the request for disbursement of funds submitted.
Known Questioned Costs: $562,676
Context: We tested the procurement of three contracts and identified one contract that did not follow federal procurement requirements.
Cause/Effect: The Village's controls were not adequate to ensure it followed the federal requirement for procurement process. As a results, there was one instance of noncompliance related to procurements.
Recommendation: We recommend the Village follow federal procurement as required in 2 CFR 200.319 (d) for all contracts reimbursed with federal funds.
View of responsible officials and planned corrective action plan: See attached corrective action plan.