Finding Text
Finding No: 2022 003 Procurement Federal Agency: U.S. Department of Education Pass Through Entity: N/A Assistance Listing Number: 84.425F Program: COVID 19 ? Educational Stabilization Fund Award Year: May 14, 2020 through June 30, 2023 (a) Criteria or Requirement Per 2 CFR 200.303, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. (b) Condition Found, Including Perspective Procurement disbursements were related to two vendors. For one of the two vendors tested, open and competitive bidding was not performed and therefore, the System was not in compliance with Federal guidelines. (c) Possible Cause The System has a management review process in place to review and approve procurement transactions in accordance with their procurement policies. The System management review control that was in place did not operate effectively to ensure open and competitive bidding occurred. (d) Questioned Cost $255,415 (e) Effect Without performing the open and competitive bidding process, the System could have charged costs to the grant that were unallowable. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the System strengthen controls over the management review process to ensure that the open and competitive bidding process is being performed on all applicable procurement transactions. (i) View of Responsible Officials Management concurs with the finding. While appropriate controls exist, but did not always operate as designed, relative to management review of expenditures, opportunity exists to retrain staff and further enhance controls. The system acknowledges that all acquisitions of property or services that exceed the simplified acquisition threshold (SAT) of $10,000 under a Federal award or sub award must use formal procurement methods to include documented procurement procedures and methods of procurement. This would include sealed bids, vendor quotes, or noncompetitive procurement where certain conditions apply.