Finding Text
2023-002: Compliance and Internal Control over Procurement - Sole Source and Suspension
and Debarment
Special Education Cluster
Assistance Listing Numbers – 84.027A; 84.027X; 84.173A; and 87.173X
Passthrough Agency: Louisiana Department of Education
Questioned Costs: $84,880
Criteria: The Uniform Guidance Federal regulations per 2 CFR section 200.320 requires, among other things, that specific criteria be met for the procurement of noncompetitive proposals. Procurement of noncompetitive proposals is procurement through solicitation of a proposal from only one source, also known as a sole source vendor. This method may only be used when one or more of the following circumstances apply:
• The item is available only from a single source.
• The purchase is in response to a public emergency that will not permit a delay
resulting from the competitive process.
• The purchase is expressly authorized by awarding or pass-through agency in
response to a written request from the non-Federal entity or after solicitation of a
number of sources, competition is determined inadequate.
To ensure compliance with these requirements, justification of the use of noncompetitive proposals and research on the availability from multiple sources must be documented. Documentation of authorization must be retained, and any initial solicitations from multiple sources which are concluded to be inadequate, and such reasoning must be documented. In addition, non-federal entities are prohibited from contracting with or making sub-awards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods or services awarded under a non-procurement transaction (e.g. a grant or cooperative agreement) that is expected to equal or exceed $25,000.
Universe/Population: The total population for procurement considerations was all vendors of the Special Education Cluster whose transactions for the year ended June 30, 2023, exceeded the
micro-purchase threshold of $10,000. Payroll and benefit-related transactions were excluded from the population. Based on these requirements, the population consisted of thirty-eight vendors totaling
$1,729,409. There was a total of twenty-four vendors whose payments exceeded $25,000 when considering compliance with suspension and debarment regulations. Only five of the twenty-four
were related to covered transactions.Condition: Five vendors with expenditures totaling $654,205 were selected for testing. We noted one of the vendors selected for testing was deemed to be a sole source provider of reading teacher
support packages by the School Board totaling $84,880. A sole source letter was obtained from the vendor, which outlined the uniqueness of the goods and services to be provided. However, it was determined that School Board did not appropriately follow the process for reviewing and documentation a sole source provider, per their federal procurement policy. This is a partially repeated finding from the prior fiscal year. For the five vendors selected for testing over suspension and debarment, the School Board asserts
it checked the sam.gov website and none of the vendors were suspended or debarred. Our testing confirmed that these five vendors were not suspended or debarred. However, documentary evidence that a vendor was not suspended or debarred was not maintained in the School Board’s records.
Cause: The School Board did not adhere to its established procurement policy for noncompetitive proposals to sole source vendors and control and internal review process was not properly followed.
In addition, turnover in job functions without properly documented procedures resulted in the School Board not maintaining the records needed to evidence compliance with suspension and debarment
requirements.
Effect: Without proper internal controls over procurement to sole source or professional service vendors or suspension and debarment regulations, the School Board may enter into contracts with vendors where the price may not be fair or reasonable or disallowed if the vendor has been suspended or debarred from doing business with the federal government.
Recommendations: The School Board should strengthen controls at the program administration level to ensure appropriate consideration to competitors are given and adequate documentation is obtained with respect to procurement of professional services and sole source products in accordance with the Uniform Guidance 2 CFR section 200.320(f). In addition, all vendors paid with federal resources should be checked for suspension or debarment. This documentation should be approved by the program director, as well as the purchasing director, and retained as evidence of the internal controls over procurement and suspension and debarment.
View of Responsible Official: Management concurs with this finding, see corrective action plan dated March 27, 2024.