Finding 45214 (2022-003)

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE ? U.S. DEPARTMENT OF THE TREASURY, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION AND INDEPENDENT SCHOOL DISTRICT NO. 270, HOPKINS, COVID-19 ? CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS ? FEDERAL ALN 21.027 2022-003 Internal Control Over Compliance With Federal Suspension and Debarment Requirements Criteria ? 2 CFR ? 180 requires Independent School District No. 283 (the District) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including suspension and debarment requirements applicable to the COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds federal program. Condition ? During our audit, we noted the District did not have sufficient controls in place within its COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds federal program 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. Our testing did not indicate any instances of noncompliance with these requirements. Context ? The District did not obtain the appropriate documentation for one of one vendor tested to ensure the vendor was not suspended or debarred from participation in federal program contracts. This was not a statistically valid sample. Repeat Finding ? This is a current year finding. Cause ? This was an oversight by district personnel. Effect ? Noncompliance with the suspension and debarment requirements could result in the District expending federal funds with 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 suspension and debarment for the COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds federal program. Internal controls over compliance for this area should 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 will review and update its policies and procedures relating to 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.