Finding Text
2024 - 005: Suspension and Debarment
Federal Agency: U.S. Department of Education
Federal Program Title: Special Education Cluster
ALN: 84.027 and 84.173
Federal Award Identification Numbers and Year: H027A230087 & H173A230086, 2024
Pass-Through Agency: Minnesota Department of Education
Pass-Through Numbers: H027A230087 & H173A230086
Award Period: July 1, 2023 – June 30, 2024
Type of Finding: Material Weakness in Internal Control Over Compliance and Other Matters
Criteria or Specific Requirement: The District should have controls in place to ensure compliance with suspension and debarment requirements of the Special Education Cluster, per the requirements of 2 CFR §200.303. The Uniform Guidance requires that when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal 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. This verification may be accomplished by either checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), collecting a certification from the entity, or adding a clause to the covered transaction with the entity.
Condition: The District did not perform the required verification procedures before entering into over covered transactions in the special education program for fiscal year 2024, and the District therefore also did not retain documentation of a control to ensure timely completion of suspension and debarment requirements.
Questioned Costs: None
Context: Of two covered transactions tested, it was noted that the District did not perform the required control over verifications on two of two. It was noted during testing and review of SAM.gov, however, that none of the vendors used were suspended or debarred.
Cause: The District’s policies and procedures did not include formal documentation of a control to ensure vendors are checked for suspension and debarment prior to entering covered transactions.
Effect: The District could have entered into a covered transaction with an entity which was suspended or debarred without realizing it.
Repeat Finding: Yes – 2023-003
Recommendation: We recommend that the District follow its procurement policies as well as requirements within the Uniform Guidance to perform the proper verification procedures on all covered transactions entered into with federal funds. Also, the District should ensure there is a formally documented control to ensure all vendors are checked for suspension and debarment prior to entering into a covered transaction.
View of Responsible Official: There is no disagreement with the audit finding.