Finding Text
Federal Agency: U.S. Department of Agriculture
Federal Program Name: Child Nutrition Cluster
Assistance Listing Numbers: 10.553, 10.555, 10.559, 10.582
Federal Award Identification Number and Year: None Provided
Pass-Through Agency: Maryland Department of Education (MSDE)
Pass-Through Number(s): None Provided
Award Period: 7/1/2023–6/30/2024
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or specific requirement:
Compliance: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)).
Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition/Context:
During the testing of ten contracts, the Board was unable to provide documentation for one contract to demonstrate compliance with their procurement policy, specifically the requirement to obtain two quotes for a small purchase.
Questioned costs: Undetermined.
Cause:
Controls were not operating effectively to ensure that the Board’s procurement policies were followed for contracts entered into where expenses were charged to the federal program.
Effect:
There is an increased risk of charging unallowed costs to the program.
Repeat Finding: No.
Recommendation:
We recommend that the Board enhance controls and procedures to ensure that it follows its procurement policies for all goods and services charged to the program. Documentation should be readily available for audit.
Views of responsible officials:
There is no disagreement with the audit finding.