Finding Text
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND MATERIAL NONCOMPLIANCE – U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, SPECIAL EDUCATION CLUSTER (INCLUDING COVID-19 FUNDING) – FEDERAL ALN 84.027 AND 84.173 AND – U.S. DEPARTMENT OF THE TREASURY, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 – CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – FEDERAL ALN 21.027
2023-001 Internal Control Over Compliance and Material Noncompliance With Federal Procurement, Suspension, and Debarment Requirements
Criteria – 2 CFR § 180.425-430 and 2 CFR § 200.318-327 requires Independent School District No. 12 (the District) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including procurement, suspension, and debarment requirements applicable to the special education cluster and coronavirus state and local fiscal recovery funds federal programs.
Condition – During our audit, we noted the District did not have sufficient controls in place resulting in material noncompliance within its special education cluster and coronavirus state and local fiscal recovery funds federal programs to ensure compliance with federal procurement requirements related to methods of procurement and to assure that it was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds.
Questioned Costs – None.
Context – For three of three vendors exceeding the micro-purchase threshold, the District did not document procurement policy and Uniform Guidance requirements related to methods of procurement and a proper documentation of suspension and debarment testing was not maintained to ensure compliance with this requirement in the current year. This was not a statistically valid sample.
Repeat Finding – This is a current year finding.
Cause – This was an oversight by district personnel, due in part, to staff turnover.
Effect – Noncompliance with procurement, suspension, and debarment requirements could result in the District expending federal funds inappropriately or utilizing vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement.
Recommendation – We recommend that the District review its internal control procedures relating to procurement, suspension, and debarment for the special education cluster and coronavirus state and local fiscal recovery funds federal programs. Internal controls over compliance should be in place to ensure compliance with federal procurement procedures, including awarding and documenting contracts based on sealed bids or quotations for the purchase of goods or services exceeding applicable federal dollar thresholds. Internal controls over compliance should also include verification that any vendor with which the District contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website.
View of Responsible Official and Planned Corrective Actions – The District agrees with the finding. The District intends to review its policies and procedures relating to procurement, suspension, and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The District has separately issued a Corrective Action Plan related to this finding.