Finding Text
2022-003 Material Weakness in Internal Controls over Compliance and Compliance Federal Agency: U.S. Department of Agriculture and U.S. Department of Education Federal Program Name: Child Nutrition Cluster and Special Education Cluster Assistance Listing Number: 10.553, 10.555, 84.027, and 84.173 Federal Award Identification Number and Year: 22MIN061N1199 and H027A210087 Pass-Through Agency: Minnesota Department of Education Pass-Through Numbers: Unknown Award Period: Fiscal Year 2022 Criteria: The district should have controls in place to ensure compliance with suspension and debarment requirements. The Uniform Guidance requires that when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by either checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), collecting a certification from the entity, or adding a clause to the covered transaction with the entity. Condition: The School District did not perform the required verification procedures over several covered transactions in fiscal year 2022. Context: Of five covered transactions tested in the Special Education Cluster, it was noted that the District did not perform the required verifications on any of the five. Of five covered transactions tested in the Child Nutrition Cluster, it was noted that the District did not perform the required verifications on one of the five. Questioned Costs: None Cause: The District has had turnover in some roles within the Special Education program. Nutrition Services has limited ability to obtain food and materials due to supply chain issues. Effect: The District could have entered into a covered transaction with an entity which was suspended or debarred without realizing it. Repeat Finding: No Recommendation: We recommend that the District follow its procurement policies as well as requirements within the Uniform Guidance to perform the proper verification procedures on all covered transactions entered into with federal funds. View of Responsible Official: There is no disagreement with the audit finding.