Finding Text
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER – (FEDERAL ALN 10.553 AND 10.555)
2024-003 Internal Control Over Compliance With Federal Suspension and Debarment Requirements
Criteria – 2 CFR § 180 and 2 CFR § 200.318-327 requires Universal Academy (the Academy) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including suspension and debarment requirements applicable to the child nutrition cluster federal program.
Condition – During our audit, we noted the Academy did not have sufficient controls in place within its child nutrition cluster federal program to ensure 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 – Not applicable.
Context – For two of two vendors exceeding the federal threshold of $25,000, proper documentation of suspension and debarment testing was not maintained to ensure compliance with this requirement. This was not a statistically valid sample.
Repeat Finding – This is a current and prior year finding.
Cause – This was an oversight by academy personnel.
Effect – Noncompliance with suspension and debarment requirements could result in the Academy 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 Academy review its internal control procedures relating to suspension and debarment for the child nutrition cluster federal program. Internal controls over compliance in this area should include documentation of procurement policies and the Uniform Guidance requirements related to suspension and debarment. These controls should also include steps to ensure any vendor with which the Academy 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 Academy agrees with the finding. The Academy will review and update its policies and procedures relating to suspension and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The Academy has separately issued a Corrective Action Plan related to this finding.