Finding Text
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, SPECIAL EDUCATION CLUSTER – FEDERAL ALN 84.027 AND 84.173
2024-001 Internal Control Over Compliance with Federal Suspension and Debarment Requirements
Criteria – 2 CFR § 180 and 2 CFR § 200 requires Rum River Special Education Cooperative (the Cooperative) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including suspension and debarment requirements applicable to the special education cluster federal programs.
Condition – During our audit, we noted that the Cooperative did not have sufficient controls in place within the special education cluster federal programs to assure compliance with contracting for goods and services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds.
Questioned Costs – None. Our testing did not indicate any instances of noncompliance with this requirement.
Context – The Cooperative did not obtain appropriate documentation that the parties with whom the Cooperative was contracting were not suspended or debarred prior to expending over $25,000 with two of three vendors tested. This was not a statistically valid sample.
Repeat Finding – This is a current and prior year finding.
Cause – The Cooperative has properly designed internal controls in place over suspension and debarment requirements applicable to special education cluster federal programs. However, the control procedures were not being performed consistently in a timely manner.
Effect – Noncompliance with the suspension and debarment requirements could result in the Cooperative expending federal funds with vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement.
Recommendation – We recommend that the Cooperative review their procedures relating to suspension and debarment requirements to ensure timely verification and documentation that any vendor with which the Cooperative contracts for goods or services exceeding $25,000 is not suspended or debarred from participating in contracts involving federal funds.
View of Responsible Official and Planned Corrective Actions – The Cooperative agrees with the finding. The Cooperative will review and update its policies and procedures relating to suspension and debarment for its federal programs to ensure compliance with the Uniform Guidance requirements. The Cooperative has separately issued a Corrective Action Plan related to this finding.