Finding Text
Finding 2022-001 Prior Finding Reference Number: 2021-001 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Federal Agency: U.S. Department of Agriculture Pass-Through Entity: Kansas Department of Education Federal Program: Child Nutrition Cluster (Assistance Listing Number 10.553/10.555/10.559) Compliance Requirement: Suspension and Debarment Condition: For the one vendor selected for testing, there was no evidence that the District considered suspension and debarment requirements prior to entering into a covered transaction. Questioned Costs: None Criteria: Per 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements (Uniform Guidance), Section 180, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include those procurement contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $ 25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 1980.995 and agency-adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transactions. When entering into a covered transaction, to determine if the entity or person is excluded or disqualified, this can be done by one of the following: (1) checking the Government-wide System for Award Management Exclusions (SAM) to determine if an entity is debarred or suspended, (2) collection of a certification from that entity, or (3) adding a clause or condition to the covered transaction. Cause: The District was not aware of the requirements related to suspension and debarment. Effect: This finding indicates that there could be some process improvements in how documentation is maintained to provide evidence that compliance requirements are being met. Additionally, the District could unintentionally enter into a covered transaction with a suspended or debarred party. Recommendation: We recommend that the District develop a more robust internal control that monitors the selection of vendors who are funded with federal grants. Management?s Response/Corrective Action Plan (Unaudited): USD 340 will correct this during our annual bid process. USD 340 will include a statement regarding verification that the entity is ?Not Suspended or Debarred? in our bid letter in June. We will also have it included in our formal contract.