Finding Text
FINDING 2025-001 – Procurement and Suspension and Debarment: Significant Deficiency in Internal Control Over Compliance (See "Schedule of Findings and Questioned Costs" for table). Criteria – 2 CFR 200 section 318(i): Procurement records. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition/context – A sample of 11 vendors was selected and documentation of procurement history was requested. For 1 of the 11 vendors selected, EES had not retained or was unable to provide documentation of the rationale for the procurement method, contract type selection, contractor selection and approval, or other basis for the contract price. Additionally, a sample of 11 vendors was selected and documentation of the suspension and debarment check history was requested. For 2 of the 11 vendors selected, EES had not retained or was unable to provide documentation of the suspension and debarment check occurring before a contract was executed. Questioned costs – None Effect – If controls are not operating effectively and documentation is not maintained, EES may purchase goods or services that do not meet the requirements of their procurement policy, which is based on federal and state regulations. Cause – EES does not have a formal process in place for documenting and retaining documentation of vendor procurement considerations in accordance with their procurement policy. Repeat finding – Yes, see 2024-001. Recommendation – We recommend EES reviews their procurement policy and ensures purchases are analyzed consistent with policy, and that the rationale for the procurement method, contract type selection, contractor selection or rejection, and the bids or quotes obtained as the basis for the contract price are documented and retained. Views of Responsible Officials and Planned Corrective Actions – EES reviewed our Policies and Procedures for reasonableness and alignment with the Funding Terms and Conditions for the California Department of Education and the California Department of Social Services. Upon notification of the finding, EES immediately began to implement internal controls ensuring that appropriate documentation is in place that documents checking of vendors' suspension and debarment status, and written justification that highlights criteria and proper documentary evidence that the procurement sole source methodology meets the above guidelines in order to conduct a sole source agreement for the organization.