Finding 1155483 (2024-003)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2024
Accepted
2025-09-26
Audit: 367780
Organization: Mille Lacs Energy Cooperative (MN)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: The Cooperative's procurement policy does not meet the requirements outlined in 2 CFR sections 200.318 through 200.326.
  • Impacted Requirements: Compliance with federal procurement standards is essential for non-federal entities operating federal programs.
  • Recommended Follow-Up: Management should create a compliant written policy and maintain proper documentation to ensure adherence to procurement requirements.

Finding Text

United States Department of Agriculture Federal Assistance Listing #10.855 Distance Learning and Telemedicine Grants United States Department of Treasury Federal Assistance Listing #21.029 COVID-19 Coronavirus Capital Projects Fund Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Criteria - Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition - In our testing of procurement, suspension, and debarment it was identified that the Cooperative’s written policy did not address the requirements of 2 CFR sections 200.318 through 200.326. Cause - Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with all of these requirements. Effect - A lack of compliant policies increases the overall risk of non-compliance. Questioned Costs - None reported. Context – Sampling was not used. Repeat Finding from Prior Years - No Recommendation - We recommend that management establish a written policy that is in compliance with all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.326 and maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. Views of Responsible Officials - There is no disagreement with the audit finding.

Corrective Action Plan

United States Department of Agriculture Federal Assistance Listing #10.855 Distance Learning and Telemedicine Grants United Stated Department of Treasury Federal Assistance Listing #21.029 COVID-19 Coronavirus Capital Projects Fund Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Finding Summary: During the course of the engagement, it was identified that the Cooperative does not have a written policy that addresses the requirements of 2 CFR sections 200.318 through 200.326. Responsible Individuals: Mark Vosacek Finance Manager Corrective Action Plan: The Cooperative will modify its written procurement policy 322 to include the requirements of 2 CFR sections 200.318 through 200.326. Anticipated Completion Date: December 31, 2025

Categories

Procurement, Suspension & Debarment Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1155482 2024-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.855 Distance Learning and Telemedicine Loans and Grants $1.88M
21.029 Coronavirus Capital Projects Fund $826,078