Finding Text
CONDITION: The Northern Cambria School District contracted with two (2) third-party vendors - Eber HVAC, Inc. for the RTU Replacement Project and Advanced Office Systems, Inc. for the purchase of copier equipment, which constitute construction-related and capital purchases respectively which require prior approval from the Pennsylvania Department of Education (PDE). The School District did not obtain the required prior approval from PDE for these expenditures.
CRITERIA: PDE and Section 2 CFR 200.439(b) of the Uniform Guidance require prior written approval by the federal or pass-through awarding agency for capital purchases including equipment, buildings, and land. Capital expenditures for special purpose equipment with a unit cost of $5,000 or more must also have prior approval.
CAUSE: School District personnel did not review the PDE and Uniform Guidance requirements for capital purchases in advance of contracting for the RTU Replacement Project and copier equipment.
EFFECT: The Northern Cambria School District did not comply with the requirements of PDE and 2 CFR 200.439(b) of the Uniform Guidance regarding obtaining prior written approval for capital expenditures.
QUESTIONED COST: $1,501,951 (Eber HVAC-$1,475,100) (Advanced Office Systems-$26,851)
RECOMMENDATION: For all future capital expenditures utilizing federal grant funding, I am recommending that the School District properly complete the necessary PDE, or other awarding agency forms, necessary to receive prior written approval for capital expenditures in accordance with PDE and Section 2 CFR 200.439(b) of the Uniform Guidance regulations.
VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and has developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).