Finding 560529 (2024-001)

Federal Agency: U.S. Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Numbers: 10.553 and 10.555 Federal Award Identification Number and Year: 2023; Federal Award Identification Number not available. Pass-Through Agency: Massachusetts Department of Elementary and Secondary Education Pass-Through Number: 03-292 Award Period: July 1, 2023 through June 30, 2024 Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria or specific requirement: Title 2 of the U.S. Code of Federal Regulations (CFR), Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Internal controls should be designed and implemented to prevent or detect noncompliance with this requirement. Condition: Swansea Public Schools (SPS) did not obtain evidence supporting their verification that entities were not suspended, debarred, or otherwise excluded from participating in the grant award transactions. Questioned costs: None. Context: The SPS did not obtain evidence of verification of the suspension and debarment status for one (1) of two (2) entities in our sample to which the SPS incurred expenditures in excess of $25,000. Cause: Internal controls were not implemented to ensure documented evidence was obtained regarding the suspension and debarment status for all entities receiving federal funds in excess of $25,000 from SPS. Effect: Risk of noncompliance with the federal award program was elevated. It was later verified the entities in question were not suspended or debarred. Repeat Finding: No. Recommendation: We recommend SPS ensure documentation be obtained supporting the suspension and debarment status of entities to which the SPS expends greater than $25,000. Such documentation could include (1) a history of searching SAM.gov exclusions, (2) certification from the entity, or (3) a clause or condition included in the contract or subaward with the entity. Views of Responsible Officials: There is no disagreement with the audit finding.