Finding 960233 (2023-002)

Criteria In accordance with 2 CFR 200.214, non-federal entities are subject to the procurement, debarment and suspension regulations implementing executive orders and 2 CFR part 180. These regulations restrict non-federal entities from entering into covered transactions with certain parties that are deemed debarred, suspended or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition and Context: Integration Charter Schools’ internal controls over compliance are not followed despite having a written policy. In accordance with 2 CFR 200 Appendix XI, Part 3-I-2, when an entity enters into a covered transaction, a non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995, is not suspended, or debarred or otherwise excluded from participating in the transaction. Integration Charter Schools has a written policy that states prior to entering into the procurement process, each contractor will be researched to determine that they have not been suspended or debarred. However, Integration Charter Schools did not follow the policy in place. Rather, the Charter School, on a quarterly basis, was verifying entities that received federal awards were not suspended or debarred after the transaction was complete. Effect Due to the verification procedure occurring after the cash disbursement was made the Charter School could have awarded suspended or debarred entities federal awards. Cause: The Charter School did not follow the suspension and debarment policies in place. Recommendation We recommend the Charter School develop a control, with formal written documentation, showing the Charter School has researched the entity prior to the Charter School entering into the covered transaction. This documentation should be reviewed by the proper authority to ensure the entity has been researched prior to entering into the covered transaction. Management’s response Refer to Corrective Action Plan attached.