Finding 519562 (2022-003)

Significant Deficiency
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2025-01-17

AI Summary

  • Core Issue: The Transit Board lacks effective internal controls over compliance, particularly in fuel procurement.
  • Impacted Requirements: Non-compliance with Title 2 U.S. Code of Federal Regulations § 200.303 regarding competitive bidding.
  • Recommended Follow-Up: Implement a more frequent competitive bidding process for fuel to ensure cost-effectiveness.

Finding Text

Federal Agency: Department of Transportation Federal Program: Formula Grants for Rural Areas and Tribal Transit Program Assistance Listing Number: 20.509 Pass-Through Agency: Minnesota Department of Transportation Pass-Through Number: MN-2019-018-01 Federal Award Identification Number and Year: MN-2019-018-01, 2022 Compliance Requirements Affected: Procurement Award Period: 1/1/22-12/31/22 Type of Finding: Significant Deficiency in Internal Controls over Compliance Criteria or Specific Requirements: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Transit Board purchased fuel from a vendor based off of an extended contract. Questioned Costs: None. Context: During testing over fuel procurement, it was noted that the Transit Board had last gone out for competitive bids on fuel in 2020. Cause: Lack of management oversight. Effect: The Transit Board could be paying for fuel at a higher price. Repeat Finding: No Recommendation: CLA recommends that the Transit Board conduct a more frequent competitive bidding process for fuel procurement. Views of Responsible Officials: There is no disagreement with the audit finding.

Corrective Action Plan

Federal Agency: Department of Transportation Federal Program: Formula Grants for Rural Areas and Tribal Transit Program Assistance Listing Number: 20.509 Federal Award Identification Number and Year: MN-2019-018-01, 2022 Compliance Requirements Affected: Procurement Award Period: 1/1/22-12/31/22 Type of Finding: Significant Deficiency in Internal Controls over Compliance and Compliance Recommendation: CLA recommends that the Transit Board conduct a competitive bidding process for fuel procurement. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Transit Board will ensure proper procedures are followed. Name of the contact person responsible for corrective action: Jeremy Monahan, Transit Director Planned completion date for corrective action plan: December 31, 2025

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 1096004 2022-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
20.509 Formula Grants for Rural Areas and Tribal Transit Program $563,191
20.500 Federal Transit Capital Investment Grants $191,200
84.126 Rehabilitation Services Vocational Rehabilitation Grants to States $990