Finding Text
Finding #2024-004; Education Stabilization Fund – CFDA No. 84.425; Year Ended June 30, 2024
CONDITION:
In 2023-24, the District failed to obtain required bids for certain goods/services purchased, but rather only obtained quotes.
CRITERIA:
Cost Principles require that allowable costs under Federal awards be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the recipient or subrecipient. With regard to obtaining bids or quotes for goods/supplies and services, both the Federal government and Pennsylvania establish thresholds for obtaining bids and quotes, with the most restrictive taking precedence. In addition, the District’s own policies require obtaining bids and price quotations for products and services where such bids or quotations are required by law.
CAUSE:
The cause was a misunderstanding by management of the requirement to utilize the more restrictive Pennsylvania imposed thresholds for the ESSER purchases in question, despite the higher thresholds under Uniform Guidance. Accordingly, the District obtained quotes for two (2) equipment purchases and one (1) service that required bids.
EFFECT:
The failure to obtain bids for the items purchased and service performed led to the District’s failure to comply with the Cost Principles contained in the Uniform Administrative Requirements.
QUESTIONED COSTS:
$63,147
PROPER PERSPECTIVE (SAMPLING):
A sample of nine (9) totaling $596,207 (94.1% of population) was selected for testing of non-payroll related ESSER expenditures. Of those, required bids were not obtained for two (2) purchases of equipment and one (1) service performed (10.6% of sample). The audit sample was statistically valid.
REPEAT FINDING:
No.
RECOMMENDATION:
We recommend that all personnel involved in purchasing, especially those in the business office, obtain a better understanding of the procurement thresholds established by both federal and state agencies, ensuring that bids or quotes are obtained, as necessary. Pennsylvania publishes an annual bulletin containing a chart for the various thresholds. This chart could be utilized as an easy reference.
MANAGEMENT RESPONSE:
Management agrees with the recommendation, and personnel involved in purchasing, especially those in the business office, will obtain a better understanding of the federal and state procurement thresholds, ensuring that bids or quotes will be obtained, as necessary. The Pennsylvania bulletin has been provided by the auditor, and we will use that as a reference, in addition to the District’s own policy.