Finding Text
U.S. Department of Education 2025-006 Weakness in Internal Control Over Compliance of Suspension and Debarment Federal Program: Special Education Cluster (IDEA); Special Education – Grants to States (IDEA, Part B) Assistance Listing No. 84.027, Special Education – Preschool Grants (IDEA, Part B – Preschool) Assistance Listing No. 84.173 Grant Period: Year Ended June 30, 2025; Pass-through Entity: Louisiana Department of Education Condition: During review of transactions entered into during the audit period under the Special Education Cluster, the School Board did not have internal controls designed or implemented to ensure verification of suspension and debarment status for covered transactions. Although audit testing determined no vendors were suspended or debarred, the absence of controls could result in material noncompliance in the future. Criteria: The requirements for nonprocurement suspension and debarment are contained in Office of Management and Budget (OMB) guidance at 2 CFR part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension,” and are adopted by federal agencies through Title 2 of the Code of Federal Regulations, applicable program legislation, and the terms and conditions of the federal award. When a recipient or subrecipient enters into a covered transaction with an entity at a lower tier, the recipient or subrecipient must verify that the entity, as defined in 2 CFR 180.995 and the applicable agency adopting regulations, is not suspended, debarred, or otherwise excluded from participation in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) obtaining a written certification from the entity, or (3) including a clause or condition in the covered transaction with that entity (2 CFR 180.300). These requirements are further described in the OMB Compliance Supplement. Cause of Condition: Review of covered transactions entered into during the audit period under the Special Education Cluster indicated that internal controls were not adequately designed or implemented to ensure compliance with federal suspension and debarment requirements. Potential Effect of Condition: Although no vendors were identified that were suspended or debarred during the period tested, the absence of a designed and implemented verification control increases the risk that the School Board could enter into transactions with ineligible vendors in the future. Such transactions could result in noncompliance with applicable requirements and may expose the School Board to potential repayment of questioned costs, withholding of funding, or other administrative remedies in the event noncompliance occurs. Recommendation: Management should design, implement, and maintain effective internal controls to ensure compliance with federal nonprocurement suspension and debarment requirements for all covered transactions under the Special Education Cluster. In addition, management should establish and enforce written policies and procedures requiring verification of suspension and debarment status for all applicable vendors and service providers prior to entering into covered transactions. Management’s Response: Management agrees with the finding and will work on designing and implementing internal controls to ensure suspension and debarment verifications are performed and documented for covered transactions under the Special Education Cluster.