Finding 611415 (2022-002)

Significant Deficiency Repeat Finding
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2023-01-14

AI Summary

  • Core Issue: The Academy lacks effective internal controls to ensure compliance with federal suspension and debarment requirements for vendors in its child nutrition programs.
  • Impacted Requirements: Failure to perform necessary vendor checks as mandated by 2 CFR 180 and Uniform Guidance, leading to potential noncompliance.
  • Recommended Follow-Up: The Academy should enhance its controls, ensuring all vendors over $25,000 are verified against the federal Excluded Parties List, and train staff on these compliance requirements.

Finding Text

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE ? U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER ? FEDERAL ALN 10.553, 10.555, AND 10.559 2022-002 Internal Control Over Compliance With Suspension and Debarment Requirements Criteria ? 2 CFR ? 180 requires the Academy to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including suspension and debarment requirements applicable to its child nutrition cluster federal programs. Condition ? During our audit, we noted the Academy did not have sufficient controls in place within its child nutrition cluster federal programs to ensure that it was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred, from participating in contracts involving the expenditures of federal program funds, as required by Uniform Guidance. For the three vendors tested, the Academy did not have documentation of performing vendor checks for suspension and debarment. Questioned Costs ? None. Context ? The Academy did not have documentation of performing vendor checks for the three vendors tested to ensure the vendor was not suspended or debarred from participation in federal program contracts. This was not a statistically valid sample. Repeat Finding ? This is a current year and prior year finding. Cause ? This was an oversight by academy personnel. Effect ? Noncompliance with suspension and debarment requirements could result in the Academy contracting with vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement. However, based on our testing, no reportable instances of noncompliance were noted in this area. Recommendation ? We recommend that the Academy review its internal controls over suspension and debarment to ensure they include adequate controls and include required verification that any vendor with which the Academy contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website. Further, all individuals with oversight of federal program expenditures should have a sufficient understanding of federal suspension and debarment. View of Responsible Official and Planned Corrective Actions ? The Academy agrees with the finding. The Academy will review its procedures relating to suspension and debarment for its federal programs, and ensure all individuals with oversight of federal program expenditures have a sufficient understanding of these requirements. The Academy has separately issued a Corrective Action Plan related to this finding.

Categories

Procurement, Suspension & Debarment Internal Control / Segregation of Duties School Nutrition Programs Significant Deficiency

Other Findings in this Audit

  • 34970 2022-002
    Significant Deficiency Repeat
  • 34971 2022-002
    Significant Deficiency Repeat
  • 34972 2022-002
    Significant Deficiency Repeat
  • 34973 2022-002
    Significant Deficiency Repeat
  • 611412 2022-002
    Significant Deficiency Repeat
  • 611413 2022-002
    Significant Deficiency Repeat
  • 611414 2022-002
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $562,083
10.553 School Breakfast Program $96,694
84.010 Title I Grants to Local Educational Agencies $65,505
10.555 National School Lunch Program $49,514
32.009 Emergency Connectivity Fund Program $41,600
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $40,000
84.027 Special Education_grants to States $31,192
21.027 Coronavirus State and Local Fiscal Recovery Funds $28,991
84.367 Supporting Effective Instruction State Grants $13,788
84.424 Student Support and Academic Enrichment Program $10,000
84.173 Special Education_preschool Grants $1,225
10.559 Summer Food Service Program for Children $52