Finding 537644 (2024-004)

Federal Agency: US Department of Education (ED) Program Name: Fund for the Improvement of Postsecondary Education ALN: 84.116 Award Number: P116Z230260; Federal Awards Year 2023 - 2024 Questioned Costs: None Repeat Finding: No 2024-004. Finding: Internal Controls Over Procurement Northern Illinois University (the University) included incorrect documentation within purchase requisition forms for small purchases and simplified acquisition procurement transactions at the time of approval of the purchase which did not allow a reviewer to determine the appropriateness of the procurement method in the Fund for the Improvement of Postsecondary Education program. Condition: The University’s internal controls over purchases include review and approval of purchase requisitions in PeopleSoft that document the procurement method selected. Out of four small purchase procurement transactions tested, four transactions (100%) were approved based on a form that summarized the incorrect procurement method. The University incorrectly indicated on a small purchase waiver form that the transactions were exempt from procurement under Illinois Procurement Code (30 ILCS 500 / 1-13(b)(8)). Out of four transactions tested meeting the simplified acquisition threshold, four transactions (100%) were approved based on a form that summarized the incorrect procurement method. The University incorrectly indicated on a small purchase waiver form that the transactions were exempt from procurement under Illinois Procurement Code (30 ILCS 500 / 1-13(b)(8)). Based on additional information provided to us during our testing, the University did have other documentation to support the history of procurement, including rationale for the method of procurement and there were no indications that procurement methods ultimately used were inappropriate. The sample was not intended to be, and was not, a statistically valid sample. Criteria: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure procurement procedures are properly followed and support is properly maintained as required by 2 CFR 200.318. Cause: University officials stated that staff turnover and lack of training on policies and procedures governing procurements subject to 2 CFR 200 lead to the incorrect documentation on the purchase requisitions. Effect: If the purchase requisition forms contain an incorrect rationale for the procurement method selected, the University could approve payments of federal funds to vendors that do not meet federal regulations. (Finding Code No. 2024-004) Recommendation: We recommend the University review current processes for small purchases and simplified acquisition transactions to ensure purchase requisition forms are completed correctly. University Response: Accepted. The University has already initiated a review of current processes and is taking steps to address the recommendation.