Finding Text
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND REPORTABLE INSTANCES OF NONCOMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER – (FEDERAL ALN 10.553, 10.555, AND 10.559)
2023-004 Internal Control Over Compliance and Reportable Instances of Noncompliance With Federal Procurement, and Suspension and Debarment Requirements
Criteria – 2 CFR § 180 and 2 CFR § 200.318-327 requires the Academy to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including procurement, and suspension and debarment requirements applicable to the child nutrition cluster federal programs.
Condition – During our audit, we noted the Academy did not have sufficient controls in place resulting in material noncompliance within its child nutrition cluster federal programs to ensure compliance with federal procurement requirements related to methods of procurement and 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.
Context – For three of three vendors exceeding the micro-purchase threshold, the Academy did not follow Uniform Guidance requirements related to methods of procurement applicable to federal program expenditures. The Academy also did not have proper documentation of suspension and debarment requirements maintained for one of one vendor tested to ensure compliance with this requirement in the current year. These were not statistically valid samples.
Repeat Finding – This is a current year finding.
Cause – This was an oversight by academy personnel.
Effect – Noncompliance with procurement, and suspension and debarment requirements could result in the Academy expending federal funds inappropriately or utilizing 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 Academy review its internal control procedures relating to procurement, and suspension and debarment for the child nutrition cluster federal program. Internal controls over compliance for this area should include documentation of compliance with Uniform Guidance requirements related to methods of procurement. These controls should also include steps to ensure any vendor with which the Academy 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 Academy agrees with the finding. The Academy will review procedures relating to procurement, and suspension and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The Academy has separately issued a Corrective Action Plan related to this finding.