Finding 513653 (2024-002)

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE AND REPORETABLE INSTANCES OF NONCOMPLIANCE– U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, SPECIAL EDUCATION CLUSTER – FEDERAL ALN 84.027 AND 84.173 2024-002 Internal Control Over Compliance and Reportable Noncompliance With Federal Procurement Requirements Criteria – 2CFR § 200.320 requires the District to establish and maintain effective internal control over compliance with procurement requirements applicable to expenditures within its special education cluster federal programs. Condition – Our testing indicated that the District did not have sufficient controls in place within its special education cluster federal programs to ensure compliance with federal procurement requirements related to methods of procurement, which resulted in reportable instances of noncompliance. Questioned Costs – $92,850. Context – For two of six vendors tested, the District did not obtain two or more quotations for contracts awarded in excess of its stated micro-purchase threshold of $10,000 within its special education cluster federal programs, as required by the Uniform Guidance. All contracts required to be awarded based on multiple quotations within the District’s special education cluster federal programs were tested. Repeat Finding – This is a current year finding. Cause – The District’s internal control procedures over procurement requirements applicable to its special education cluster federal programs were not being consistently followed. Effect – Noncompliance with the procurement requirements could result in the District expending federal funds inappropriately or not obtaining competitively prices goods or services, which could be viewed as a violation of the award agreement. Recommendation – We recommend the District review its internal control procedures for its special education cluster federal programs to ensure that controls in place over compliance with federal procurement requirements are being consistently applied, including awarding contracts based on multiple quotations for the purchase of goods or services in excess of the District’s micro-purchase threshold of $10,000, as required by the Uniform Guidance. View of Responsible Official and Planned Corrective Actions – There is no disagreement with the audit finding. District management will review its procedures relating to procurement for its federal programs to ensure that multiple quotations are obtained when required and that adequate documentation is retained. The District has separately issued a Corrective Action Plan related to this finding.