Finding Text
Federal Agency: U.S. Department of Transportation Federal Program Title: Formula Grants for Rural Area and Tribal Transit Program AL Number: 20.509 Federal Award Identification Number and Year: MN-2023-045-00 Pass-Through Agency: Minnesota Department of Transportation Pass-Through Number(s): 1054531 Award Period: 1/1/2024-12/31/2024 Type of Finding: • Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: 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 200.326. 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. Non-federal entities should also follow any state procurement requirements as well. Condition: During our testing we noted the Organization did not apply any procurement procedures for four small purchases and two proposals as they did not perform nor retain adequate documentation in accordance with Uniform Guidance and state requirements. Questioned costs: Unknown Context: Six out of six procurement selections did not have any procurement procedures followed for a total of $192,756 charged to the grant. This was not a statistically valid sample. Cause: Vendors in place had been procured in prior years, before current management assumed operations. Current management was unable to verify if the policies were followed. Effect: Potential effect of noncompliance with Uniform Guidance and state requirements when procuring goods and services for expenditures over federal awards. Repeat finding: This is a repeat finding. Recommendation: The Organization should review 2 CFR sections 200.318 through 200.326 and state requirements for procurement. The Organization should ensure documents are retained to support whether procurement policies were followed for vendors procured in years past. Views of responsible officials and planned corrective actions: There are no disagreements with the audit finding. The Organization will review the procurement standards as well as ensure documents are retained to support whether procurement policies were followed.