Finding Text
Finding 2023-007: Significant Deficiency, Procurement and Noncompliance Finding – Procurement – Internal Control over Procurement
Assistance Listing Program Title and Number: Special Education Cluster (IDEA) 84.027
Federal Agency: Department of Education
Pass-through Entity: N/A
Award year: 2022 and 2023
Criteria or specific requirement:
The City must follow procurement standards set out at 2 CFR sections 200.318 through 200.326. There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319.
Condition:
SPED/Grant Administration did not adhere to the Danbury Public Schools “Bids and Purchases-Competitive” procurement policies, that were compliant with Federal Part 3 compliance guidelines. The DPS had a procurement policy in place that was consistent with the standards of the aforementioned compliance sections; however, the City did not follow their own procurement policy requiring two quotes for a micro-purchase expenditure, three quotes for a small purchase expenditure and advertising for bids publicly for the large >$5,000 purchase expenditures. They only obtained one quote for each expenditure for micro and small purchases, and they did not use a public bid process for expenditures over $5,000.
Cause:
While the City has a formal policy around required bids, the thresholds had not been updated in several years and there was a lack of controls that ensured the City DPS procurement policy was being adhered to in order to be compliant with the compliance standards.
Effect:
Possible effects on the performance is centered around potentially not awarding the purchase to the lowest qualified bidder.
Prevalence:
Systemic in nature.
Questioned Cost:
None
Repeat Finding:
No
Recommendation:
We recommend that the City implement controls that require review of each expenditure to ensure the City obtained the adequate number of bids for each expenditure. Additionally, we recommend that the City update their procurement thresholds to be more consistent with the compliance thresholds.
Views of Responsible Officials:
Management agrees with the finding.