Finding No.: 2025-013 – Procurement and Suspension and Debarment Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.403 Consolidated Grants Federal Award No.: S403A230002, S403A240002 Criteria or specific requirement (including statutory, regulatory or other citation) #1: 2 CFR 200.318(a) states the recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in 2 CFR 200.317 through 200.327. Accordingly, documented procedures must ensure consistency to standards in 2 CFR 200.324(a) which articulates that the recipient or subrecipient must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. The method and degree of analysis conducted depend on the facts surrounding the particular procurement transaction. Criteria or specific requirement (including statutory, regulatory or other citation) #2: In accordance with 2 CFR 180.300, entities that enter into covered transactions must verify that the person with whom they intend to do business is not excluded or disqualified by: a) Checking SAM.gov Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person. According to 2 CFR 180.220(b)(1), a procurement transaction is considered a covered transaction if the contract amount is expected to equal or exceed $25,000. Condition #1: There is no cost or price analysis performed related to PO No. 20250970 amounting to $328,465. Condition #2: For the following procurement transactions, GDOE did not verify whether a person or a vendor is excluded or disqualified pursuant to the requirements of 2 CFR 180.300 prior to entering into covered transactions: Purchase Order # Purchase Order Amount FY25 Expenditure 20250974 $ 239,975 $ 239,975 20251164 239,970 239,970 20250970 328,465 328,465 20250248 232,496 232,496 20250615 150,546 150,546 20250240 140,365 140,365 20250325 35,948 35,948 20250702 32,208 32,208 20250943 29,792 29,792 20250694 219,068 97,568 20250180 174,676 174,676 20250207 147,525 147,525 20250268 129,439 129,439 20250075 49,610 49,610 20250051 35,140 35,140 20250189 25,650 25,650 20250079 195,413 195,413 $2,406,286 $2,284,786 Cause #1: GDOE lacks internal control over periodic review of procurement policies to ensure all required provisions stated in the Compliance Supplement are covered, specifically, the requirements of 2 CFR 200.324 regarding cost or price analysis. Cause #2: GDOE’s policies and procedures only require a review of excluded parties in SAM.gov for competitive selection procedures covering contracts exceeding $250,000. However, this is only performed for new vendors during the vendor registration or creation process and not on per covered transaction basis. In addition, GDOE’s policies do not specify how the performance of the vendor review should be documented, hence, there was no trail whether such was actually performed. Effect or Potential Effect: GDOE is in noncompliance with the applicable procurement and suspension and debarment compliance requirements. Questioned costs: $2,284,786. The questioned costs relate to the FY25 expenditures of procurement transactions where the required verification before entering into covered transaction was not performed. Per auditors’ verification, the vendors with whom GDOE transacted business with are not suspended or debarred as of September 30, 2025. Context #1: We identified 246 procurement transactions during the year totaling $4,856,571. We tested 42 procurement transactions totaling $2,405,276. The samples were statistically valid. Of 42 procurement transactions tested, one transaction exceeded the simplified acquisition threshold where no cost or price analysis was performed. Context #2: We identified 39 procurement transactions subject to suspension and debarment compliance requirements during the year totaling $4,031,280. We tested 17 procurement transactions totaling $2,284,786. The samples were statistically valid. For all 17 (or 100%) procurement transactions tested, the required verification before entering into covered transaction was not performed. Identification as a repeat finding, if applicable: 2024-009 Recommendation: GDOE should revisit its procurement policies and ensure all required provisions stated in the Compliance Supplement are covered, specifically, the requirements of 2 CFR 200.324 regarding cost or price analysis. GDOE should establish formal policy requiring verification and retaining documentation of procedures performed, to verify that the person in a covered transaction with whom they intend to do business is not excluded or disqualified. View of Responsible Officials: GDOE agrees with the finding and provides details in its Corrective Action Plan.