Finding 43096 (2022-005)

Material Weakness
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2023-03-29
Audit: 48700
Organization: Sisseton-Wahpeton College (SD)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: The College's procurement policy lacks essential elements required by federal regulations, leading to non-compliance.
  • Impacted Requirements: Failure to verify vendors against the central contractor registry risks contracting with ineligible parties, violating 2 CFR 200 standards.
  • Recommended Follow-Up: Management should establish and enforce procedures to ensure compliance with federal procurement requirements.

Finding Text

2022-005 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity?s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any vendor who is suspended or debarred or is otherwise excluded from the central contractor registry. Condition: The College?s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, two vendors were not verified against the central contractor registry prior to expenses incurred to ensure that the vendor was not suspended or debarred. Cause: The College?s procurement policy does not include all the required elements as outlined in the Uniform Guidance. There was a lapse in oversight of the internal control process ensuring vendors are verified against the central contractor registry. Effect: Without a written procurement policy in accordance with the Uniform Guidance, demonstrating that the program complies with laws, regulations, and other compliance requirements is difficult. Failing to verify vendors against the central contractor registry may result in the College contracting for services with ineligible parties Questioned Costs: None reported. Context/Sampling: The College had two transactions totaling $120,822 equaling or exceeding $25,000 that were selected for suspension and debarment testing. Those two contracts selected for testing totaled $120,822. Repeat Finding from Prior Year: No Recommendation: We recommend that management implement procedures and control processes to comply with the federal requirements noted above. Views of Responsible Officials: Management is in agreement with the finding.

Corrective Action Plan

Finding 2022-005 Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance Finding Summary: The College?s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, two vendors were not verified against the central contractor registry prior to expenses incurred to ensure the vendor was not suspended or debarred. Responsible Individuals: Dr. Lane Azure, President Corrective Action Plan: Rarely does the college use unknown vendors that have been used by the college in the past. However, we will now check with SAM to determine if vendors have been debarred or suspended. Anticipated Completion Date: July 1, 2022

Categories

Procurement, Suspension & Debarment Internal Control / Segregation of Duties

Other Findings in this Audit

  • 43094 2022-003
    Material Weakness
  • 43095 2022-004
    Material Weakness Repeat
  • 43097 2022-003
    Material Weakness
  • 43098 2022-004
    Material Weakness Repeat
  • 43099 2022-005
    Material Weakness
  • 43100 2022-003
    Material Weakness
  • 43101 2022-004
    Material Weakness Repeat
  • 43102 2022-005
    Material Weakness
  • 619536 2022-003
    Material Weakness
  • 619537 2022-004
    Material Weakness Repeat
  • 619538 2022-005
    Material Weakness
  • 619539 2022-003
    Material Weakness
  • 619540 2022-004
    Material Weakness Repeat
  • 619541 2022-005
    Material Weakness
  • 619542 2022-003
    Material Weakness
  • 619543 2022-004
    Material Weakness Repeat
  • 619544 2022-005
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $2.88M
15.027 Assistance to Tribally Controlled Community Colleges and Universities $1.21M
10.766 Community Facilities Loans and Grants $608,891
84.063 Federal Pell Grant Program $509,603
47.079 Office of International Science and Engineering $423,120
15.114 Indian Education_higher Education Grant Program $245,226
47.083 Integrative Activities $162,683
84.101 Career and Technical Education - Grants to Native Americans and Alaska Natives $161,832
93.859 Biomedical Research and Research Training $128,082
10.221 Tribal Colleges Education Equity Grants $103,627
47.076 Education and Human Resources $82,180
84.031 Higher Education_institutional Aid $71,777
10.500 Cooperative Extension Service $63,216
84.365 English Language Acquisition State Grants $42,355
84.007 Federal Supplemental Educational Opportunity Grants $30,002
84.033 Federal Work-Study Program $16,269
84.378 College Access Challenge Grant Program $3,650