Owatonna Public Schools #761Local Government

2022 ? 001 Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP2619 - 2022 Pass-Through Agency: Minnesota Department of Education Pass-Through Number(s): Unknown Award Period: July 1, 2021 through June 30, 2022 ? Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of reporting. The District should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, we noted that the District did not complete one of the two Financial Reporting Forms by the deadline. Instead, an annual, comprehensive Financial Reporting Form was submitted by the end of year deadline. Questioned Costs: None Context: During our testing, it was noted that the District only submitted one of the two required reports related to the grant. Cause: The related staff that would be involved with the preparation of the report were out of the office around the due date due to COVID-19. Effect: Lack of proper procedures and controls related to grant reporting could result in reports not being filed timely or in inaccurate reports being submitted to the grantor. Repeat Finding: No. Recommendation: We recommend the District implement procedures and controls in relation to the required Coronavirus State and Local Fiscal Recovery Funds, to ensure they are completed accurately and timely going forward. Views of Responsible Officials: There is no disagreement with the audit finding.

Finding Number: 2019-001 ? Suspension and Debarment Federal Agency: U.S. Department of Agriculture Federal Program: Child Nutrition Cluster CFDA Numbers: 10.553, 10.555, and 10.559 Pass Through Agency: Minnesota Department of Agriculture Pass Through Number: 1-0761-000-000 Award Periods: Year ended June 30, 2019 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Finding Criteria: The District should have procedures in place to ensure that it verifies that an entity with which it plans to enter into a covered transaction and any of its principals are not debarred, suspended, or otherwise excluded from participating in such as transaction. Condition: Noted during testing of suspension and debarment that there was no formal documentation that a check was performed to ensure that a vendor was not suspended or debarred prior to entering into a contract. Questioned Costs: None noted. Context: The issue was noted with one of the two contracts tested for suspension and debarment in relation to the Child Nutrition Cluster. Cause: The District did not formally document that it confirmed the vendor was not suspended or debarred prior to entering into a contract with the vendor. Effect: The District could enter into a contracts with suspended and debarred vendors. Repeat Finding: Yes. Recommendation: CLA recommends the District puts in place the proper procedures to check suspension and debarment for vendors prior to working with them. View of Responsible Official: There is no disagreement with the audit finding.

Finding Number: 2019-002 ? Procurement Federal Agency: U.S. Department of Agriculture Federal Program: Child Nutrition Cluster CFDA Numbers: 10.553, 10.555, and 10.559 Pass Through Agency: Minnesota Department of Agriculture Pass Through Number: 1-0761-000-000 Award Periods: Year ended June 30, 2019 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Finding Criteria: ?200.319 requires that all procurement transactions must be conducted in a manner providing full and open competition consistent with the standards of this section. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements. Condition: During our testing, it was noted that the District did not retain quotes or document its considerations of open competition for a procurement over the micro-purchase threshold before the related contract was awarded. Questioned Costs: None noted. Context: Of a sample of 5 general procurement transactions which we tested, we noted 1 for which the District did not retain quotes or document its considerations of open competition. Cause: The District did not have the controls and procedures in place to ensure the proper documentation of its procurement and open competitions considerations related to the underlying procurement. Effect: A lack of proper documentation could lead to using vendors for small purchase acquisitions without ensuring comparable pricing from other vendors and justifying costs. Lack of an updated policy could lead to improper procedures and selections related to how procurements are selected and awarded Repeat Finding: No. Recommendation: It is recommended that the District creates some sort of standard procedure or form that indicates what method is being used to track all procured items over the micro-purchase threshold ($10,000) to help formally document of how open competition is being assessed. View of Responsible Official: There is no disagreement with the audit finding.

Finding Number: 2019-003 ? Procurement Federal Agency: U.S. Department of Education Federal Program: Special Education Cluster CFDA Numbers: 84.027 and 84.173 Pass Through Agency: Minnesota Department of Education Pass Through Number: 1-0761-000-000 Award Periods: Year ended June 30, 2019 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Finding Criteria: ?200.319 requires that all procurement transactions must be conducted in a manner providing full and open competition consistent with the standards of this section. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements. Condition: During our testing, it was noted that the District did not retain quotes or document its considerations of open competition for a procurement over the micro-purchase threshold before the related contract was awarded. Questioned Costs: None noted. Context: There was one applicable procurement coded to the special education cluster. The issue was noted with this one, applicable procurement. Cause: The District did not have the controls and procedures in place to ensure the proper documentation of its procurement and open competitions considerations related to the underlying procurement. Effect: A lack of proper documentation could lead to using vendors for small purchase acquisitions without ensuring comparable pricing from other vendors and justifying costs. Lack of an updated policy could lead to improper procedures and selections related to how procurements are selected and awarded. Repeat Finding: No. Recommendation: It is recommended that the District creates some sort of standard procedure or form that indicates what method is being used to track all procured items over the micro-purchase threshold ($10,000) to help formally document of how open competition is being assessed. View of Responsible Official: There is no disagreement with the audit finding.

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