Finding 13103 (2022-003)

Material Weakness
Requirement
I
Questioned Costs
$1
Year
2022
Accepted
2022-12-21

AI Summary

  • Core Issue: EC3 did not follow proper procurement procedures for purchasing 300 laptops worth $362,004, violating both internal policies and federal guidelines.
  • Impacted Requirements: The purchase exceeded the $30,000 threshold for competitive bids and did not meet the requirements of the Uniform Guidance for procurement.
  • Recommended Follow-up: EC3 should implement stronger procedures to ensure compliance with purchasing policies, including mandatory competitive bids for applicable purchases.

Finding Text

Finding 2022-003: Internal Control and Compliance over Procurement Federal Agency: Department of the Treasury Program: Coronavirus State and Local Fiscal Recovery Funds: 21.027 Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.237, EC3 is required to ensure that procurement methods used for purchases are appropriate based on the dollar amount of the purchase. Condition: EC3 could not provide evidence that the purchase of 300 laptops for an aggregate purchase price of $362,004 followed formal procurement procedures. The purchase exceeded both the $30,000 procurement threshold for competitive bids set by EC3?s purchasing policy and the Uniform Guidance simplified acquisition threshold of $250,000. In addition, in accordance with the Uniform Guidance, a purchase price from the Commonwealth of Pennsylvania COSTARS cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. Effect: EC3 was not in compliance with the procurement requirements of the Uniform Guidance. Questioned costs: $362,004 based on invoice for purchase of 300 laptops applied to the program. Recommendation: We recommend that EC3 establish procedures to ensure that their purchasing policy is followed including the use of competitive bids or proposals, when appropriate.

Corrective Action Plan

View of Responsible Officials and Planned Corrective Action: EC3 agrees with the recommendation of its auditor, Maher Duessel, that the EC3 Finance Department must ensure that EC3 follows the approved and compliant purchasing practices. However, in the beginning, the College was still in a start-up mode and most of its essential purchases from Vendors could not meet EC3?s aggressive timetable to get the College up and running. So being practical, the College needed to act fast to get its provisions in place to get the College up and running, and although this was an informal process, the Management team diligently reviewed, justified, and approved all the purchases based on the supporting documentation. As of August 2022, the Finance Department has recognized the lack of internal control over the financial purchasing process and has informally enforced the purchasing policy. The Finance Department will be reviewing all EC3 financial policies, including its purchasing policy and will be making recommendations to the EC3?s Cabinet and Board of Trustees. The Finance Department will and must enforce the purchasing policy, once approved, update the policy online and ensure the policy is followed by EC3 staff and its compliant with the Commonwealth of Pennsylvania Policies.

Categories

Questioned Costs Procurement, Suspension & Debarment

Other Findings in this Audit

  • 13102 2022-002
    Material Weakness
  • 589544 2022-002
    Material Weakness
  • 589545 2022-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $872,625