Finding Text
Finding 2024-001: Procurement
Federal Agency: U.S. Department of Education
Pass-through agency: Pennsylvania Department of Education
Assistance Listing Number: 84.425 Education Stabilization Fund; 84.027 IDEA
Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. The Uniform Guidance requires that non-federal entity must maintain records sufficient to detail the history of procurement and adherence to related compliance requirements.
Records should include, but are not necessarily limited to, the following rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.318(i)
Noncompetitive procurement can only be awarded if one or more of the following circumstances apply 2 CFR 200.320(c):
The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold:
The item is available only from a single source;
The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation;
The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or
After solicitation of a number of sources, competition is determined inadequate. adequately document costs in accordance with 2 CFR 200.403(g).
The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. 2 CFR 200.324(a). Per PDE and Pennsylvania Bulletin, the Entity must perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold of $250,000.
Condition: The District did not follow the appropriate procedures to comply with Uniform Grant Guidance. During our audits and PDE’s monitoring review completed in fiscal year 2023-2024, the ESSER Monitoring Team and we noted the following Procurement Findings:
The School District was unable to provide purchase orders for several services purchased with Federal funds.
The School District did not document its rationale for noncompetitive procurement.
The School District did not conduct a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold of $250,000.
Procurement files for 2 vendors, which exceed $10,000 but not $22,500 for goods and $10,000 but not $250,000 for services, did not have the accompanying three price or rate quotations.
The School District did not conduct a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold of $250,000.
Vendor contracts did not contain the necessary contract provisions
The ESSER Monitoring Team was unable to obtain and review sufficient documentation to verify that the procurement was competitively performed for 1 vendor, such as proof of advertisement, request for proposal, bid evaluation, and award letter for procurement of the following vendor
Context: During testing, it was noted that the District had entered into a lease agreement in 2017 to acquire computer equipment. The equipment was acquired through COSTARS, a cooperative purchasing program. While purchases through COSTARS meet the cooperative purchase requirement for local government purchasing under 62 Pa.C.S. section 1902, they do not meet the more stringent requirements of the Uniform Grant Guidance. Subsequently, the District decided to budget for and pay for this lease agreement in the 2021-2022 school year under the Education Stabilization Fund. In using federal funds to pay for the lease agreement, the District inadvertently did not follow its procurement policy. While the school district developed a plan to correct these procedures, it was not fully implemented until the 2023-2024 school year.
Cause: Non-compliance with Uniform Guidance Procurement requirements.
Effect: The District did not follow its procurement policy and ultimately did not comply with the standards of the Uniform Grant Guidance.
Questioned Cost: None
Identification of Repeat Finding: Yes
Recommendation: The District must implement procedures to fully comply with Uniform Guidance Procurement requirements.
View of Responsible Officials: The District will require all payments to have either a purchase order or request for payment form completed. The Accounts Payable Coordinator is responsible for ensuring the form is signed for all disbursements. For the particular item cited by our monitors the Superintendent and Business Manager signed off on the invoice instead of a request for payment form. The District Accountant / Business Office Manager discussed with the Accounts Payable Coordinator that going forward this is insufficient. All payments must have either a purchase order or request for payment form. The District Accountant / Business Office Manager reviews backup documentation for check disbursements. During their review if any payments are discovered to be missing a purchase order or request for payment form, he will notify the Accounts Payable Coordinator to complete the form. This is effective immediately.
The District has also reviewed the applicable Uniform Guidance Procurement requirements and has developed an electronic procurement process that all staff member making the purchase with federal funds, must complete a form prior to the procurement being made. Then the Business Manager approves the form. There is a box to check if the procurement is a sole source. If this is checked the Business Manager will require justification. This process was presented by the Business Office to Leadership Personnel on 5/9/24 and is effective now.