Finding 485116 (2023-002)

Significant Deficiency
Requirement
I
Questioned Costs
-
Year
2023
Accepted
2024-08-26
Audit: 317904
Organization: Irl Council (FL)

AI Summary

  • Core Issue: The Council did not keep the solicitation open for the required 30 days, leading to the need for reclassification of $48,120 in expenditures.
  • Impacted Requirements: This situation violates 2 CFR 200.303 and FAR Section 5.203 regarding internal controls and bid response times.
  • Recommended Follow-Up: Management should ensure all procurements comply with award terms and regulations before issuing purchase orders or contracts.

Finding Text

2023-002 PROCUREMENT U.S. Department of Environmental Protection ALN 66.456 – National Estuary Program Federal Award ID Number: 4T-02D39922 2023 Funding Criteria: 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal controls. As stated in FAR Section 5.203, Publicizing and Response Time, the Council is required to allow for at least a 30-day response time for the receipt of bids or proposals from the date of issuance of the solicitation. Condition: The grantor identified payments made to a subrecipient for which the solicitation was held open for less than 30 days, prompting the grantor to ask the Council to replace those expenditures with other grant-eligible expenditures. Cause: Management was not aware of this requirement. Effect: The Council reclassified $48,120 of expenditures to be funded by other revenue sources and recorded $48,120 of deferred revenue that will be recognized in fiscal year 2024 when payments are made to the new subrecipient. Questioned Costs: None. Perspective: In our sample of procurements tested, we did not identify any other instances of non-compliance. Recommendation: Management should review all procurements for compliance with award terms, Uniform Guidance, and Federal Acquisition Regulations prior to submitting issuing the purchase order or subrecipient contract.

Corrective Action Plan

PROCUREMENT 2023-002 PROCUREMENT Recommendation: The IRL Council should review all procurements for compliance with award terms, Uniform Guidance, and Federal Acquisition Regulations prior to submitting issuing the purchase order or subrecipient contract. Management’s Response: The IRL Council Operating Procedures Manual lists 14 days as the minimum response time for competitive procurement of services. However, during an EPA review of IRL Council procurement practices, a single instance was found to be less than 30 days per federal procurement standards. In a letter to EPA dated May 3, 2024, the IRL Council proposed a corrective action that would replace the contractor that had been procured less than the 30-day response time with one that had been procured consistent with federal policy and defer revenues to FY 2024 for the new project. The Corrective action was approved by EPA by issuance of Award 4T-02D39922 modification 3 on June 16, 2024. The IRL Council will amend its Operating Procedures Manual to ensure that all future procurements, whether federally funded or otherwise, require a minimum 30-day response time. Responsible Parties: Daniel Kolodny, Chief Operating Officer and Duane De Freese, Executive Director Anticipated Completion: November 15, 2024

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 485115 2023-001
    Material Weakness
  • 485117 2023-003
    Significant Deficiency
  • 485118 2023-003
    Significant Deficiency
  • 485119 2023-004
    Significant Deficiency
  • 485120 2023-004
    Significant Deficiency
  • 1061557 2023-001
    Material Weakness
  • 1061558 2023-002
    Significant Deficiency
  • 1061559 2023-003
    Significant Deficiency
  • 1061560 2023-003
    Significant Deficiency
  • 1061561 2023-004
    Significant Deficiency
  • 1061562 2023-004
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
66.456 National Estuary Program $832,199