Finding Text
Federal Agency: US Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553 and 10.555 Federal Award Identification Number and Year: 212MN061N1199 & 212MN101S9007 Pass-Through Agency: Minnesota Department of Education Pass-Through Numbers: 212MN061N1199 & 212MN101S9007 Award Period: Fiscal Year 2022 Type of Finding: Material Weakness in Internal Control over Compliance Other Matters Criteria or specific requirement: 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: 1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA); 2) collecting a certification from the entity; or 3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Also, ?200.318 - ?200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: The School did not retain formal documentation of its testing and controls to ensure that all vendors over the $25,000 contract threshold on a School-wide basis were not suspended or debarred prior to awarding the related contracts. Also, it was noted during procurement testing that the use of a sole source procurement method was not properly documented in accordance with requirements of the Uniform Guidance. Questioned costs: $579,955 was paid to the three applicable vendors. Context: The suspension and debarment compliance issue was noted with 2 of the 3 contracts tested. For procurement compliance, 3 of the 8 items tested did not have the proper documentation. Cause: It was corroborated with School staff that SAM.gov is checked before entering into any federally funded contracts, as part of the School?s standard procedures, but they did not retain any formal documentation of the completion of that process, as the School was unaware of the requirement to document all of its suspension and debarment checks. For the procurement portion of the finding, the School had challenges with regards to the availability of products and supply chain, and was not aware of the specific requirements of the documentation when utilizing the sole source procurement method. Effect: The School was not in compliance with documentation requirements of the uniform guidance with regards to procurements and suspension and debarment. Repeat Finding: No Recommendation: We recommend that the School reviews its related policies and procedures to ensure it is retaining documentation showing that the School crosschecked the vendors with procurements over the threshold of $25,000 at the time of procurement, which could be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). It is also recommended that the School puts in place the proper procedures for sufficiently documenting all procurements and methodology used. Views of responsible officials: There is no disagreement with the audit finding.