Finding 1131408 (2024-003)

FINDING 2023-003 – PROCUREMENT AND SUSPENSION AND DEBARMENT (Repeat Finding of 2022-003) Significant Deficiency FFINDING 2024-003 – PROCUREMENT AND SUSPENSION AND DEBARMENT Significant Deficiency Federal Programs: Charter Schools – Assistance Listing Number 84.282 Repeat Finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-003. Criteria 2 CFR 200.318(i) establishes the need to maintain records sufficient to detail the history of procurement. 2 CFR 180.300 establishes the responsibilities of participants entering into covered transactions. Condition The Organization lacked sufficient documentation to support the rationale of procurement methods, selection of contract types, contractor selection or rejection, and basis for the contract price. We also noted suspension and debarments requirements were not given consideration prior to entering into these transactions. However, we noted there were adequate invoices to support the purchases. Cause and Effect As described in 2024-001, the Organization has not established a formal process related to federal awards to identify all key compliance requirements and changes in compliance requirements, evaluate risks of noncompliance with these requirements, and respond to such risks of noncompliance through establishing or changing processes and internal controls. Additionally, certain individuals, within a department, responsible for the use of federal funds lacked knowledge of the compliance requirements pertaining to the use of the funds. As a result, they did not comply with requirements for proper procurement or in relation to suspension and debarment. Recommendation We recommend the Organization develop a system of internal controls aligned with the applicable compliance requirements to sufficiently document procurements and to ensure suspension and debarment is considered prior to entering into future covered transactions. Views of Responsible Officials and Planned Corrective Actions The Organization’s Corrective Action Plan is included on pages 42 through 44.