Finding Text
Noncompliance and Material Weakness 2 CFR 3474.1 provides that the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this section gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE, except as otherwise noted in that section. Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200. A nonfederal entity must: 1. Meet the general procurement standards in 2 CFR 200.318, which include oversight of contractors? performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR 200.320(a)(1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable (2 CFR 200.320(a)(1)(ii)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR 200.320(a)(2)(i)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-Federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR 200.320(b)(1); the competitive proposals method under the conditions specified in 2 CFR 200.320(b)(2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of five circumstances are met, in accordance with 2 CFR 200.320(c). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR 200.324(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR 200.324(d)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR 200.327. These provisions are described in Appendix II to 2 CFR Part 200, ?Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.? Western Toledo Preparatory Academy Procurement Policy for Federal Grants indicates the following methods of procurement will be used for all purchases of goods and services made with federal funds: 1. Purchases under $2,000 require little formal documentation; they are likely to be a catalog purchase, with prices that are readily available from many vendors. A quick notation or copy of the prices checked from at least one other source should be attached to the order or noted in the file. Conduct all procurement transactions in a manner that maximizes opportunities, increases quality (if a factor), and reduces cost of the purchase. 2. Purchases from $2,000 to $10,000 should have a telephone or other quotations and simple purchase or performance descriptions. Inquire in the open market to ensure an advantageous price and quality. The file should document the inquiries made and offers received from at least three sources. 3. Purchases from $10,000 to $100,000 should be treated more formally, though the acquisition procedures can still be somewhat streamlined. Consider using mini-proposals for negotiated acquisitions; more formal purchase and performance descriptions should be included, with bid responses requirements spelled out. To ensure that you have an adequate number of bidders, you may wish to advertise and devise pre-qualification procedures aimed at vendors who offer goods and services you use often. Purchases over $10,000 require grater documentation and cost allowability, need for the procurement, and the vendor selection. Request competitive quotes orally or in writing, from at least three different sources. The file shall document each invitation made and offer received. Document Prices: Maintain files on all quotations solicited and offers and bides received and any criteria for selection. In all instances in which the lowest bid is not awarded in the contract, justification for the selection must me contained in the file. Due to deficiencies in monitoring compliance over procurement, 18 percent of the procurements did not contain the required price or rate quotations. The Academy expended the following amounts without using the proper procurement method: o $30,559 was paid to a vendor for materials and installation of a projector; however, the Academy could not provide documentation to support the required price quotations were obtained from a minimum of three vendors. o $17,588 was paid to a vendor for materials and installation of a video surveillance system; however, the Academy could not provide documentation to support the required price quotations were obtained from a minimum of three vendors. Without proper controls over procurement, there is an increased risk that the Academy is not in compliance with applicable federal regulations. Noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. The Academy should review the procurement requirements specified above and ensure the proper procurement method is used. The Academy should also maintain adequate documentation to detail the history of procurement. Officials? Response: See Corrective Action Plan