Finding 541984 (2024-003)

Material Weakness
Requirement
I
Questioned Costs
-
Year
2024
Accepted
2025-03-31

AI Summary

  • Core Issue: There is a material weakness in internal controls and non-compliance with procurement requirements for federal funds.
  • Impacted Requirements: Procurement must ensure full competition and follow formal methods for contracts over $250,000, as outlined in §200.319 and §200.320.
  • Recommended Follow-Up: Enhance staff training on procurement policies and ensure adherence to established procedures to mitigate risks.

Finding Text

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: MD-0044 and 2021 Award Period: March 11, 2021 through December 31, 2024, liquidated by December 31, 2026 Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-Compliance Criteria or Specific Requirement: Per §200.319 and §200.320, all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition. Per §200.320, there are specific circumstances in which noncompetitive procurement can be used. Per §200.320, formal procurement methods must be used on procurements exceeding $250,000. Questioned Costs: Unknown Condition/Context: Two of five vendors tested did not have the proper documentation maintained to support that the non-competitive procurement method used was appropriate under the circumstances. Three of five vendors tested did not follow the appropriate procurement method given the dollar value of expenditures paid to the vendor. Cause: At the time of grant inception, the non-compliance was primarily due to a lack of awareness and training among staff regarding the procurement policy requirements. Effect: The failure to follow proper procurement procedures increases the risk of favoritism, fraud, and inefficient use of resources. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission continue to follow the procurement policy and procedures now established and provide comprehensive training to all relevant staff on procurement policies and procedures. Views of Responsible Officials: Management agrees with the finding.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 541979 2024-001
    Significant Deficiency
  • 541980 2024-002
    Significant Deficiency Repeat
  • 541981 2024-003
    Material Weakness
  • 541982 2024-001
    Significant Deficiency
  • 541983 2024-002
    Significant Deficiency Repeat
  • 1118421 2024-001
    Significant Deficiency
  • 1118422 2024-002
    Significant Deficiency Repeat
  • 1118423 2024-003
    Material Weakness
  • 1118424 2024-001
    Significant Deficiency
  • 1118425 2024-002
    Significant Deficiency Repeat
  • 1118426 2024-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.752 Rural Econnectivity Pilot Program $4.89M
21.027 Coronavirus State and Local Fiscal Recovery Funds $4.05M
10.863 Community Connect Grant Program $107,108
32.002 Universal Service Fund - High Cost $18,905