Finding 559855 (2024-002)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2024
Accepted
2025-05-08

AI Summary

  • Core Issue: The District failed to maintain necessary documentation proving compliance with competitive bidding procedures for a contract awarded under Ohio Rev. Code § 167.081.
  • Impacted Requirements: This oversight violates 2 CFR § 200.320(b) and 2 CFR § 200.318(e), risking misuse of public funds and potential loss of grant funding.
  • Recommended Follow-Up: The District should review and update its procurement policy and ensure adherence to Uniform Guidance and Ohio Revised Code before future contracts.

Finding Text

2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this section gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE, except as otherwise noted in that section. 2 CFR § 200.320(b) states in part that when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. 2 CFR § 200.318(e) states to foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. 2 CFR §200.320(2)(a) states for small purchases the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Ohio Rev. Code § 167.081, states that a regional council may enter into a unit price contract for materials, labor, services, overhead, profit, and associated expenses for the repair, enlargement, improvement, or demolition of a building or structure if the contract is awarded pursuant to a competitive bidding procedure of a county, municipal corporation, or township or a special district, school district, or other political subdivision that is a council member. A political subdivision that is a member of a regional council may participate in a contract entered into under Ohio Rev. Code § 167.081. Purchases under a contract entered into under Ohio Rev. Code § 167.081 are exempt from any competitive selection or bidding requirements otherwise required by law. Furthermore, the District’s Procurement – Federal Grants/Funds Policy (#6325) details the District’s procedures for procurement with federal funds. Specifically, Maintenance of Procurement Records: The District shall maintain records sufficient to detail the history of all procurements. These records will 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 (including a cost or price analysis). The District participated in The Ohio Purchasing Council’s unit price contract with Prodigy Building Solutions, LLC., for the School District's roofing, HVAC, and Lighting project, pursuant to Ohio Rev. Code § 167.081. The School District utilized ESSER grant funds for parts of these projects. The School District did not maintain documentation that Ohio Purchasing Council followed competitive bidding procedures of a council member pursuant to O.R.C. 167.081 when awarding the unit price contract to Prodigy Building Solutions respectively, failing to meet the documentation requirements of 2 CFR § 200.320(b) and 2 CFR § 200.318(e) noted above. Failure to comply with the applicable Uniform Guidance Requirements and the Ohio Revised Code could result in misuse of public funds, potential questioned costs, and/or potential loss of grant funding. The District should review its policy, Uniform Guidance requirements, and the Ohio Revised Code before entering into any contracts that require competitive bidding. In addition, the District should fully implement its procurement policy.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 559845 2024-001
    Material Weakness
  • 559846 2024-001
    Material Weakness
  • 559847 2024-001
    Material Weakness
  • 559848 2024-001
    Material Weakness
  • 559849 2024-001
    Material Weakness
  • 559850 2024-001
    Material Weakness
  • 559851 2024-001
    Material Weakness
  • 559852 2024-001
    Material Weakness
  • 559853 2024-001
    Material Weakness
  • 559854 2024-002
    Material Weakness Repeat
  • 559856 2024-002
    Material Weakness Repeat
  • 559857 2024-002
    Material Weakness Repeat
  • 1136287 2024-001
    Material Weakness
  • 1136288 2024-001
    Material Weakness
  • 1136289 2024-001
    Material Weakness
  • 1136290 2024-001
    Material Weakness
  • 1136291 2024-001
    Material Weakness
  • 1136292 2024-001
    Material Weakness
  • 1136293 2024-001
    Material Weakness
  • 1136294 2024-001
    Material Weakness
  • 1136295 2024-001
    Material Weakness
  • 1136296 2024-002
    Material Weakness Repeat
  • 1136297 2024-002
    Material Weakness Repeat
  • 1136298 2024-002
    Material Weakness Repeat
  • 1136299 2024-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $500,000
10.553 School Breakfast Program $214,026
84.425 Education Stabilization Fund $206,511
10.559 Summer Food Service Program for Children $204,984
84.424 Student Support and Academic Enrichment Program $122,640
84.010 Title I Grants to Local Educational Agencies $92,650
84.027 Special Education Grants to States $70,753
10.555 National School Lunch Program $62,118
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) $33,967
84.173 Special Education Preschool Grants $19,333
10.556 Special Milk Program for Children $330