Finding 10959 (2023-001)

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER – FEDERAL ALN 10.555, 10.553, AND 10.582 2023-001 Internal Control Over Compliance With Federal Suspension and Debarment Requirements Criteria – 2 CFR § 180 requires Independent School District No. 280 (the District) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including suspension and debarment requirements applicable to child nutrition cluster federal programs. Condition – During our audit, we noted the District did not have sufficient controls in place within its child nutrition cluster to assure that it was not contracting for goods or 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 District did not obtain appropriate documentation for one of five contracts tested to ensure the vendor was not suspended or debarred from participation in federal program contracts. Also, for another one of the five contracts tested, appropriate documentation was obtained, however, the control procedures were not performed timely enough to be effective. This was not a statistically valid sample. Repeat Finding – This is a current year and prior year finding. Cause – The District has properly designed internal controls in place over suspension and debarment requirements applicable to child nutrition cluster federal programs. However, the control procedures were either not being performed consistently or were not performed in a timely enough manner to be effective. Effect – Noncompliance with the procurement requirements could result in the District expending federal funds inappropriately or utilizing 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 District review its internal control procedures relating to suspension and debarment applicable to child nutrition cluster federal programs. Internal controls over compliance for this area should include verification that any vendor with which the District contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website. View of Responsible Official and Planned Corrective Actions – The District agrees with the finding. The District will review and update its policies and procedures relating to suspension and debarment applicable to child nutrition cluster federal programs to ensure compliance with the Uniform Guidance in the future. The District has separately issued a Corrective Action Plan related to this finding.