Finding Text
Finding No. 2022-013
Federal Agency: U.S. Department of Education
Assistance Listing No. and Title: 84.027 Special Education – Grants to States (IDEA, Part B)
Area: Procurement and Suspension and Debarment
Questioned Costs: $105,959
Criteria:
§ 2 CFR 200.317 provides that when procuring property and services, states must use the same policies and procedures they use for procurements from their non-federal funds.
PSS Procurement Rules and Regulations Part § T60-40-210(b) provides that purchases not exceeding $500 may be made without securing bids or price quotations if the Chief of Procurement and Supply considers the price reasonable. Such determination shall be made in writing and shall indicate: (1) the reason why price quotations were not sought; (2) the utility of the purchase; (3) an explanation of why the price is reasonable under the circumstances.
§ T60-40-210(d) also provides that price quotations from at least three vendors must be obtained and the selection must based on competitive price and quality for procurement valued at under $10,000. Any price quotations obtained must be written, documented, and submitted to the Chief of Procurement and Supply for approval.
PSS Procurement Rules and Regulations Part § T60-40-225(a) Competitive Sealed Proposals provides that when the Commissioner of Education determines in writing upon the advice of legal counsel that the use of a competitive sealed bidding is either not practical or not advantageous to the Public School System, a contract may be entered into by competitive sealed proposals. Also, § T60-40-225(g) provides that after proposal evaluation, a notice of intent to award the contract to the responsible offeror whose proposal is determined in writing to be the most advantageous to PSS, taking into consideration price and the evaluation factors set forth in the request for proposals, shall be issued to all offerors.
Condition:
Of 60 non-payroll transactions tested aggregating $120,642 of $1,895,080 in total program non-payroll expenditures, we noted the following:
1. For 7 (or 12%), transactions totaling $1,356 pertained to small purchases not exceeding $500 and for which no price quotations were made. Evidence was not provided showing that a written determination of the reasonableness of price was performed in accordance with § T60-40-210(b).
See Schedule of Findings and Questioned Costs for chart/table.
2. For 18 (or 30%) transactions totaling $104,603 pertained to procurements entered into by competitive sealed proposals. Evidence was not provided showing that the Commissioner of Education has determined in writing that the procurement satisfies the condition for use of competitive sealed proposals in accordance with § T60-40-225(a). Further, Notices of Intent to Award were not provided for the reason that there was only one proposer. § T60-40-225(g) does not discuss exemptions for instances where there is only one proposer.
See Schedule of Findings and Questioned Costs for chart/table.
Cause:
PSS failed to effectively implement its procurement rules and regulations.
Effect:
PSS is in noncompliance with applicable procurement and suspension and debarment requirements. The reported questioned cost is $105,959.
Recommendation:
PSS should ensure compliance with its procurement rules and regulations. The Procurement and Supply office should implement additional controls to ensure that procurement documentation is complete in accordance with PSS Procurement Rules and Regulations § T60-40. PSS should also perform a regular review of its procurement rules and regulations to align with federal requirements on procurement.
Views of responsible officials:
The PSS Corrective Action Plan provides a detailed rationale for disagreement with the finding.
Auditor response:
Condition 1 – PSS’ procurement regulations in T60-40-210(b) specifically provides the information required to be made in writing by the Chief of Procurement and Supply, namely: (1) the reason why price quotations are sought, (2) the utility of the purchase; and (3) an explanation of why the price is reasonable under the circumstances. The supporting documents signed by the Chief of Procurement and Supply and the Commissioner of Education do not provide these representations. The condition remains.
Condition 2 – Ultimately, written communication from the Commissioner of Education for the condition for use of competitive sealed proposals is required in T60-40-225(a). The condition remains.