Finding Text
2023-004 Improve Procurement Procedures Federal Agency: U.S. Department of Education Cluster/Program: Special Education Cluster Award Name: Special Education Grants to States and Special Education Preschool Grants AL Number(s): 84.027/84.173 Award Year: 2022, 2023 Compliance Requirement: Procurement, Suspension & Debarment Type of Finding Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement OMB’s Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (UG) requires that grant recipients follow procurement procedures for the acquisition of property or services under a federal award. Management is also responsible for establishing and maintaining effective internal controls over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context During our testing of 2 vendor transactions in excess of the micro-purchase threshold of $10,000 under the Special Education Cluster, it was determined that state and federal procurement policies were not followed for 1 vendor. Cause Weaknesses in the design and implementation of internal controls. Effect or Potential Effect Due to the weaknesses in internal control noted above, there is a risk that procurements may be awarded to vendors in a manner that is not consistent with federal or state procurement requirements. Questioned Costs Due to the condition noted, we were unable to determine if the costs charged to the grant were allowable. AL Number(s) Name of Federal Program or Cluster Questioned Costs 84.027/84.173 Special Education Cluster $162,108 Identification as a Repeat Finding This is a repeat of finding 2022-004. Recommendation The City should address the weaknesses in internal controls noted above in order to ensure that federal procurements are conducted in accordance with federal and state requirements. Views of Responsible Official and Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.