Finding Text
PROCUREMENT United States Department of Transportation – Federal Transit Administration (FTA) Passed through Louisiana Department of Culture, Recreation, and Tourism – Office of State Parks Recreation Trails Program (Federal Assistance Listing No. 20.219) Criteria: Procurement standards set at 2 CFR 200.318 and 200.319 require procurements to be conducted in a manner providing full and open competition and that contract awards are based on the terms and conditions of the solicitation. Additionally, 2 CFR 200.516 (a)(4) requires the auditor to report known question costs greater than $25,000 for a federal program not audited as a major program when such costs come to the auditor’s attention. Condition: During audit procedures performed over contracts, we became aware of noncompliance related to the Recreation Trails Program which was not audited as a major program. The population selected for testing was all contracts entered into during the fiscal year regardless of funding. We sampled a total of 11 contracts. One contract was identified under this program that was awarded to the lowest bidder; however, a significant deductive change order reducing the contract amount was approved at the same time as the contract award resulting in this selection. This resulted in a material modification to the contract amount at the time of award. Cause: The exception noted above appears to be the result of inadequate controls over procurement and contract approval processes. Questioned Costs: $52,648 representing the amounts expended under this contract in the current fiscal year. Effect: Approving a deductive change order concurrently with the award may have impacted the competitive bidding process and calls into question whether the contract was awarded based on the original bid terms. Recommendation: Ensure contract awards are made based on the original bid specifications and that any change orders are approved subsequent to award and in accordance with procurement requirements. View of Responsible Official: Management agrees with the finding and will take corrective action. See corrective action plan submitted by management.