Finding Text
Material Weakness/Noncompliance – Questioned Cost
47 CFR § 54.1710, in part, requires entities requesting funding to certify they are only seeking support for eligible equipment and/or services provided to students and school staff who would otherwise lack connected devices and/or broadband services sufficient to engage in remote learning. Additionally, 47 CFR § 54.1715, requires equipment inventory records to be maintained and identify: (i) The device or equipment type (i.e. laptop, table, mobile hotspot, modem, router); (ii) The device or equipment make/model; (iii) The device or equipment serial number; (iv) The full name of the person to whom the device or other piece of equipment was provided; and (v) The dates the device or other piece of equipment was loaned out and returned to the school or library, or the date the school or library was notified that the device or other piece of equipment was missing, lost, or damaged. 47 CFR 54.8(d), in part, states “unless otherwise ordered, any persons suspended or debarred shall be excluded from activities associated with or related to the schools and libraries support mechanism.” Furthermore, the School District’s Board policy #6325 – Procurement – Federal Grants/Funds, in part, states “The District shall not subcontract with or award subgrants to any person or company who is debarred or suspended. For contracts over $25,000, the District shall confirm that the vendor is not debarred or suspended by either checking the Federal government’s System for Award Management, which maintains a list of such debarred or suspended vendors at www.sam.gov; collecting a certification from the vendor; or adding a clause or condition to the covered transaction with that vendor. (2 CFR Part 180 Subpart C).”
The School District estimated unmet need for eligible equipment when it applied for ECF Program funds. However, the School District was unable to provide, at the time the reimbursement request was submitted, the determination of the actual number of eligible students with the unmet need, as required by the ECF Program. Additionally, the School District did not maintain a detailed inventory listing of the equipment, consisting of 1,305 laptops, as required by the ECF Program. Therefore, $391,500 (1,305 laptops, purchased at $300/unit) in expenditures from the Emergency Connectivity Fund (ECF) Program is considered a questioned cost. Furthermore, the School District did not have proper internal controls in place to verify and maintain documentation supporting the vendor had not been suspended or debarred.
Failure to maintain the appropriate supporting documentation in according with the ECF Program requirements (reimbursements requests, unmet need determinations, and inventory listings), could result in additional questioned costs, and reduced future federal funding. Additionally, not having appropriate controls in place may result in issuing payments, using federal funds, to vendors that are suspended or debarred.
We recommend the School District implement additional control procedures that ensure all staff fully understand the ECF Program requirements and procedures are in place to support reimbursement requests. Additionally, we recommend that prior to entering into contracts, the School District verify and maintain supporting documentation that the vendors are not suspended or debarred.