Finding 969506 (2023-001)

Reference Number: 2023-001 Compliance Requirement: Procurement and Suspension/Debarment Type of Finding: Compliance Internal Control Impact: None Compliance Impact: Material Noncompliance AL Number and Title: 84.425 - COVID-19 Education Stabilization Fund Federal Awarding Agency: U. S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $1,029,533.57 Items purchased were not competitively bid in accordance with Procurement and Suspension/Debarment requirements. Finding The U.S. Code of Federal Regulations Title 2, Part 200.318, of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states that non-Federal entities must have and use its own documented procurement procedures which reflect State and local laws and regulations provided that the procurements conform to applicable Federal law and the standards identified within that section. The Code of Alabama 1975, Title 39, which is a State law, requires the construction, installation, repair, renovation of public buildings in excess of $50,000.00 that are paid, in whole or part, with public funds to be bid under the provisions of the Public Works Law. In addition, the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2CFR 200.320, states that when the aggregate dollar amount is higher than the simplified acquisition threshold ($250,000.00), the Uniform Guidance requires one of the two “formal procurement methods”, sealed bids or formal request for proposals should be used. The Blount County Board of Education (the “Board”) entered a Public Works contract in November 2021 for the purchase and installation of HVAC units at multiple local schools totaling $1,576,971.00 of which $1,029,533.57 of COVID-19 Education Stabilization Funds were expended during the audit period, The Board did not obtain bids on the project in accordance with the State of Alabama Public Works Law. The Board used a purchasing consortium contract which is not allowed under the Public Works Law or the procurement guidelines contained in the Uniform Guidance for purchases greater than the simplified acquisition threshold. As a result, the Board did not comply with Uniform Guidance procurement requirements for these purchases. Recommendation: The Board should ensure compliance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR 200.318 and CFR 200.320 and the Code of Alabama 1975, Title 39. Views of Responsible Officials of the Auditee The Board agrees with the finding.