Finding Text
Finding 2022-001Instance of Non-Compliance ? Procurement, Suspension, Debarment ? Procurement ? GrantsFederal ProgramUnited States Department of EducationI.D.E.A Cluster (84.365A)Criteria: In accordance with 2 CFR sections 200.320(a) (1) and (2) small purchase methods of procurement are to be used for purchases exceeding the micro-purchase limit, $10,000.Statement of Condition: During our testing of the I.D.E.A. Cluster, the District was unable to provide support that proper federal procurement standards were met for a purchase of software. We selected all vendors paid in excess of $10,000 dollars for testing. Four vendors were identified. The District maintains proper documentation of small purchase procurement for three of the four vendors.Questioned Costs: None that exceed $25,000.Context: During our testing of Federal grant compliance, we selected all vendors paid in excess of the micro-purchase federal procurement threshold and traced to procurement documentation. Per 2 CFR 200.320 ?if small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.? The District stated that the software purchase is considered a single source vendor and the purchase was awarded under noncompetitive procurement. However, the District was unable to provide adequate documentation the vendor was a sole source vendor.Cause and Effect: The District follows the State of NJ Local Public School Contract law. In some cases the requirements of Federal procurement are stronger than those of the State. Under State procurement the purchase is considered a purchase of proprietary software and is excluded from competitive procurement. The same exclusion does not apply for Federal Procurement standards and this instance was missed.Recommendation: We suggest the District strengthen internal controls and procedures to ensure that all purchases made in excess of the Federal procurement thresholds are made in accordance with 2 CFR 200.Views of Responsible Officials and Planned Corrective Actions: District management concurs with the finding and has developed a corrective action plan in response to the recommendation above.