Finding 560521 (2024-002)

Significant Deficiency
Requirement
I
Questioned Costs
-
Year
2024
Accepted
2025-05-15
Audit: 356420
Organization: Aclamo (PA)

AI Summary

  • Core Issue: Procurement policies were not followed, lacking documentation for compliance checks and contractor evaluations.
  • Impacted Requirements: Non-compliance with 2 CFR 200.318 could lead to questioned costs and risks of noncompetitive practices.
  • Recommended Follow-Up: Provide training for procurement staff, conduct periodic reviews for compliance, and maintain thorough documentation of procurement activities.

Finding Text

2024-002: Procurement Program: Coronavirus State and Local Fiscal Recovery Funds CFDA No.: 21.027 Federal Grantor: U.S. Department of the Treasury Passed-through: Montgomery County Grant No.: MPRF-22-435, ACLAMO Expansion ARPA Grant Type of Finding: Significant Deficiency in Internal Control Condition: The organization’s procurement policies were not followed when selecting the major contractors for the expansion project. Specifically, there was no documentation maintained for federal compliance checks or the evaluation and ranking of candidates by the infrastructure committee. Criteria: Under 2 CFR 200.318, non-federal entities are required to maintain documented procurement procedures that align with applicable federal, state, and local laws; this includes maintaining records that detail the history of procurement. Cause: The organization does not have effective controls in place to ensure the procurement policies and procedures are followed. Effect: Noncompliance with federal procurement standards could lead to questioned costs for expenditures under the Coronavirus State and Local Fiscal Recovery Funds program. It also increases the risk of noncompetitive practices and missed opportunities to engage small and disadvantaged businesses. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A sample of 4 contractors was selected for testing of Procurement. Repeat Finding from Prior Year: No. Recommendation: The organization should provide training for staff involved in procurement to ensure they understand and follow the documented policies, conduct periodic reviews of procurement activities to verify compliance with the policies, and maintain documentation of the procurement activities. Views of Responsible Officials and Planned Corrective Action: We agree with the auditors’ comments, and the following action will be taken to improve the situation. We have taken steps to strengthen compliance and oversight. We are committed to developing and implementing standardized procedures for documenting meetings and procurement-related decisions, in collaboration with a delegate from the Infrastructure Committee. These procedures are being led by ACLAMO and will involve a designated Construction Manager to monitor compliance with standardized procedures and reporting throughout the project, that meeting minutes are properly recorded by the grantor’s requirements, and that all activities are compliant with the grant and contract requirements. The Infrastructure Committee delegate’s role will be to ensure alignment and transparency. ACLAMO will provide mandatory training for all staff involved in the procurement process and will conduct a comprehensive review of its procurement policy to ensure alignment with Uniform Guidance.

Corrective Action Plan

Procurement – policies related to procurement for the APRA contract were not followed, effective internal controls were not in place to ensure policies related to procurement were followed. ACLAMO acknowledges and agrees with Finding 2024-002 regarding the lack of adherence to procurement policies and internal controls under the ARPA (American Rescue Plan Act) contract. To address this issue, the Interim Executive Director and the Financial Team have taken immediate steps to strengthen compliance and oversight. Specifically: Oversight and Delegation: ACLAMO and its Board of Directors have agreed to hire a full-time finance director for the organization. In conjunction with the ongoing designated Construction Manager, these individuals will ensure that all procurement and financial reporting actions are in accordance with internal policies and federal guidelines stated in the contract, and that project documentation is compiled and securely stored in a timely manner for audit readiness. Infrastructure Committee Procedures: The Interim Executive Director, alongside other members of ACLAMO management, are committed to developing and implementing standardized procedures for documenting meetings and procurement-related decisions, in collaboration with a delegate from the Infrastructure Committee. These procedures are being led by ACLAMO and will involve the designated Construction Manager to monitor compliance with standardized procedures & reporting throughout the project, that meeting minutes are properly recorded by the grantor's requirements, and that all activities are compliant with the grant and contract requirements. The Infrastructure Committee delegate’s role will be to ensure alignment and transparency. Training and Capacity Building: To ensure consistent application of procurement policies, ACLAMO will provide and require mandatory training for all staff involved in procurement and contract management. Training will cover federal procurement standards, internal procedures, and documentation protocols. Policy Review and Update: As part of our continuous improvement efforts, ACLAMO will conduct a comprehensive review of its procurement policy to ensure it fully aligns with federal Uniform Guidance (2 CFR 200) and make updates where needed. The revised policy will be disseminated to all relevant personnel. ACLAMO is committed to strengthening internal controls, ensuring transparency, and maintaining full compliance with all contractual and federal requirements.

Categories

Procurement, Suspension & Debarment Internal Control / Segregation of Duties

Other Findings in this Audit

  • 560522 2024-003
    Significant Deficiency
  • 1136963 2024-002
    Significant Deficiency
  • 1136964 2024-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $2.32M
21.023 Emergency Rental Assistance Program $867,629
93.558 Temporary Assistance for Needy Families $260,008
17.225 Unemployment Insurance $179,879
93.048 Special Programs for the Aging, Title Iv, and Title Ii, Discretionary Projects $112,500
97.088 Disaster Assistance Projects $71,224
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $67,416
93.268 Immunization Cooperative Agreements $21,442
93.568 Low-Income Home Energy Assistance $6,612
81.042 Weatherization Assistance for Low-Income Persons $4,732