Finding Text
Condition: The Organization did not have written procedures regarding federal cash management, allowability of costs pertaining to federal funds, procurement procedures, or written standards of conduct covering conflicts of interest and governing the performance of its employees engaged in the selection, award and administration of federal contracts. Neither did the Organization have evidence of verication that the providers of covered transactions were not suspended, debarred or otherwise excluded. Criteria: In accordance with 2 CFR Section 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, the Organization must have written procedures regarding federal cash management (Section 200.302(b)(6)), allowability of costs pertaining to federal funds (Section 200.302(b)(7)), procurement procedures (Section 200.318(a)), and written standards of conduct covering conflicts of interest and governing the performance of its employees engaged in the selection, award and administration of federal contracts (Section 200.318(c)(1)). In accordance with 2 CFR Section 180, OMB Guidelines to Agencies on Government-Wide Debarment and Suspension (Nonprocurement), the Organization must have verified that the provider of covered transactions is not suspended, debarred or otherwise excluded (Section 180.300). Effect: The Organization was not in compliance with procurement provisions in 2 CFR Section 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and 2 CFR Section 180, OMB Guidelines to Agencies on Government-Wide Debarment and Suspension (Nonprocurement). Cause: The Organization had no internal control structure in place to implement the procurement provisions of 2 CFR Section 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and 2 CFR Section 180, OMB Guidelines to Agencies on Government-Wide Debarment and Suspension (Nonprocurement). Recommendation: The Organization should create an internal control structure in place to implement the procurement provisions 2 CFR Section 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and 2 CFR Section 180, OMB Guidelines to Agencies on Government-Wide Debarment and Suspension (Nonprocurement), create required written procedures and adhere to them. Repeat Finding: No Views of Responsible Officials: Management of Challenger Learning Center of Northwest Indiana, Inc. acknowledges the findings identified in the audit and is in agreement with the condition as stated. We recognize that certain deficiencies were identified related to donor-restricted grants, and federal grant compliance requirements. As this was the Organization’s first experience managing federal funding, some compliance requirements were not fully understood at the time; however, all actions taken were in good faith and with the intent to appropriately steward funds. Management is committed to strengthening internal controls and ensuring full compliance moving forward. Corrective actions have already been initiated, including the liquidation of remaining federal funds in accordance with grant requirements and the development of formalized policies and procedures to address procurement, financial tracking, and documentation practices.