INGENUITY PREP PUBLIC CHARTER SCHOOL

Criteria and Condition: In accordance with the procurement standards as promulgated in Section 200.319 of 2 CFR Chapter 1, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, as well as code Section 74.45 of the Education Department General Administrative Regulations (EDGAR), a cost and price analysis is required to be completed for every procurement action. For those contracts with an estimated cost value of greater than $250,000, regulations require procurement through a competitive sealed bid process. As a requirement of formal bidding, the following requirements apply: ? Bids must be solicited from an adequate number of known suppliers, providing them sufficient response time. ? The invitation for bids must define the items or services for bidders to properly respond. ? All bids will be opened at the time and place prescribed in the invitation for bids. ? A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. ? Any or all bids may be rejected if there is a sound documented reason. In the event the procurement contract is determined to be eligible for sole source, the following requirements apply: ? Justification of the use of noncompetitive proposal must be documented. ? Uniqueness of the service to be procured from the contractor. ? Explanation of need for contractor?s expertise linked to the project. ? Research on availability from multiple sources must be documented ? Documentation of authorization must be retained. Ingenuity Prep Public Charter School contracted with a construction company with the use of federal dollars, however procurement procedures were not followed. Questioned Cost: $0 Context: During the year ended June 30, 2021, Ingenuity Prep Public Charter School commenced the design and construction of an expansion project relating to the school, which is a part of the educational facility. These services resulted in a cost greater than $250,000, however formal sealed bids were not solicitated. As a result, construction services were awarded without a competitive price and cost analysis. In addition, there was no support or documentation related to this contract had this contract qualified under the sole source criteria. It should be noted that services by this contractor were completed prior to the commencement of the June 30, 2020, independent single audit, which was issued on November 16, 2020. As a result of the timing, management had not yet been made aware of the issues surrounding the procurement of this contract. Corrective action was taken subsequent to the completion of the construction services. Cause: The construction company involved in the rehabilitation project had been utilized for multiple phases of a much larger construction project, which was expected to be over a period of multiple years. Prior to the commencement of the first phase of the project, which had occurred years prior, the Ingenuity Prep Public Charter School publicly advertised and procured services in accordance with federal guidelines. Although each phase of the project was a new and separate contract, it was the belief of school management that the bidding from Phase I would satisfy subsequent phases of the project. Effect: Federal procurement standards have been established to ensure that all procurement actions are conducted in a manner to ensure, to the maximum extent practical that the solicitation and award of a procurement transaction is most advantageous to both the federal government and Ingenuity Prep Public Charter School based on an analysis of price, quality, and other factors considered. When contracts are not publicly advertised and bid, a cost and price analysis is not conducted for those transactions resulting in no guarantee that the federal government has received the most advantageous award possible. Recommendation: We recommend for future procurement contracts resulting in a cost greater than $250,000, including additional planned phases of facility rehabilitation, that a formal bidding process be implemented. Once bids are received, a written cost and technical evaluation should be made. Based on the results, the contract should be awarded to the company whose proposal is most advantageous based on price and other factors considered. Views of Responsible Official: Management believes it is important to safeguard federal funds, of which one part is the procurement process for vendors to be paid with federal funds. To this end, management recognizes the issue related to this finding and will address it through the following steps: 1) train relevant staff members on federal procurement rules; 2) review procurement procedures and ensure they are aligned with federal rules and guidelines; and 3) for any future federal grant awards, follow the established procurement procedures.

1. Finding Number 2021-001: DC Opportunity Scholarship Program: CFDA# 84.370C Views of Responsible Officials: Ingenuity Prep Charter School agrees with the recommendation. Planned Corrective Action: For all future procurement contracts that result in a cost of $250,000, including already planned renovations and construction projects, a formal bidding process that complies with all relevant regulations and Uniform Guidance Procurement standards to select appropriate vendors will be implemented. An evaluation will be made based upon what is most advantageous for the organization and the project including, but not limited to, price and other factors. A procurement checklist will be created and executed alongside the bidding process, as well. Anticipated Completion Date: Immediately. Responsible Individual: Ashanti Herndon, Chief Financial and Operations Officer

2020-001

Criteria and Condition: In accordance with Title 2, Section 200.318 of the OMB Code of Federal Regulations, non-federal organizations are prohibited from contracting with parties that are debarred or whose principals are suspended or debarred from performing under a federal award. When a non-federal organization enters into a contract with a party for goods or services in an amount greater than $25,000, or enters into a subrecipient agreement irrespective of the award amount, the organization must verify that the entity and its principals are not suspended or debarred or otherwise excluded from participating in a federal award. The Ingenuity Prep Public Charter School, did not comply with the requirements as it relates to "Debarred and Suspended Parties." Questioned Cost: $0 Context: The Charter School entered into a contract with a not for profit organization, that has been classified as a vendor, for services where federal funds were utilized for the payment of such services. The Charter School did not utilize procedures to ensure that the vendor was not debarred or suspended from working on the federal award program. Cause: During the year ended June 30, 2021, there was a turnover in the position of the Chief Operating Officer. Because of this turnover, as well as the timing of the transition, the requirement to obtain debarred party certifications was not conducted. The outgoing employee, who was responsible for ensuring debarred certifications were obtained, was not aware of this federal requirement nor of the need to obtain such certifications. Effect: Not obtaining the proper evidence to ensure that a party is not debarred or suspended from doing work on a federal award could ultimately result in the Charter School entering into a vendor contract with an ineligible party. If payments are made to a vendor that is excluded from participating in a federal award, the Charter School may be required to return such funds to the Federal granting agency. Recommendation: The Federal agency recommends that debarred and suspended verification be accomplished through one of three methods. These methods include (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a separately executed certification from the entity, or (3) adding a clause or condition to the actual subgrant agreement with the contracting party. We recommend the use of option number 2 or 3 above over option number 1 because it provides better assurance that not only is the organization permitted to participate in a federal award, but the principals are also permitted to work under a federal grant. Views of Responsible Officials: For contracts greater than $25,000 the Chief Financial and Operations Officer will obtain from the subgrant entity a separately executed certification that verifies that the entity and its principals are not suspended or debarred or otherwise excluded from participating in a federal award.

2. Finding Number 2021-002: DC Opportunity Scholarship Program: CFDA# 84.370C Views of Responsible Officials: Ingenuity Prep Charter School agrees with the recommendation. Planned Corrective Action: For contracts greater than $25,000 the Chief Financial and Operations Officer will add a clause to to which the vendor has to certify that the entity and its principals are not suspended or debarred or otherwise excluded from participating in a federal award. Anticipated Completion Date: Immediately. Responsible Individual: Ashanti Herndon, Chief Financial and Operations Officer

2020-001 DC Opportunity Scholarship Program: CFDA# 84.370C Criteria and Condition: In accordance with the procurement standards as promulgated in Section 200.319 of 2 CFR Chapter 1, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, as well as code Section 74.45 of the Education Department General Administrative Regulations (EDGAR), a cost and price analysis is required to be completed for every procurement action. For those contracts with an estimated cost value of greater than $250,000, regulations require procurement through a competitive sealed bid process. As a requirement of formal bidding, the following requirements apply: ? Bids must be solicited from an adequate number of known suppliers, providing them sufficient response time. ? The invitation for bids must define the items or services for bidders to properly respond. ? All bids will be opened at the time and place prescribed in the invitation for bids. ? A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. ? Any or all bids may be rejected if there is a sound documented reason. In the event the procurement contract is determined to be eligible for sole source, the following requirements apply: ? Justification of the use of noncompetitive proposal must be documented. ? Uniqueness of the service to be procured from the contractor. ? Explanation of need for contractor?s expertise linked to the project. ? Research on availability from multiple sources must be documented ? Documentation of authorization must be retained. Ingenuity Prep Public Charter School contracted with a construction company with the use of federal dollars, however procurement procedures were not followed. Questioned Cost: $0 Context: During the year ended June 30, 2020, Ingenuity Prep Public Charter School commenced the design and construction of an expansion project relating to the school, which is a part of the educational facility. These services resulted in a cost greater than $250,000, however formal sealed bids were not solicitated. As a result, construction services were awarded without a competitive price and cost analysis. In addition, there was no support or documentation related to this contract had this contract qualified under the sole source criteria. Cause: The construction company involved in the rehabilitation project had been utilized for multiple phases of a much larger construction project, which was expected to be over a period of multiple years. Prior to the commencement of the first phase of the project, which had occurred years prior, the Ingenuity Prep Public Charter School publicly advertised and procured services in accordance with federal guidelines. Although each phase of the project was a new and separate contract, it was the belief of school management that the bidding from Phase I would satisfy subsequent phases of the project. Effect: Federal procurement standards have been established to ensure that all procurement actions are conducted in a manner to ensure, to the maximum extent practical that the solicitation and award of a procurement transaction is most advantageous to both the federal government and Ingenuity Prep Public Charter School based on an analysis of price, quality, and other factors considered. When contracts are not publicly advertised and bid, a cost and price analysis is not conducted for those transactions resulting in no guarantee that the federal government has received the most advantageous award possible. Recommendation: We recommend for future procurement contracts resulting in a cost greater than $250,000, including additional planned phases of facility rehabilitation, that a formal bidding process be implemented. Once bids are received, a written cost and technical evaluation should be made. Based on the results, the contract should be awarded to the company whose proposal is most advantageous based on price and other factors considered. Views of Responsible Official: Management believes it is important to safeguard federal funds, of which one part is the procurement process for vendors to be paid with federal funds. To this end, management recognizes the issue related to this finding and will address it through the following steps: 1) train relevant staff members on federal procurement rules; 2) review procurement procedures and ensure they are aligned with federal rules and guidelines; and 3) for any future federal grant awards, follow the established procurement procedures.

Ingenuity Prep Charter School respectfully submits the following corrective action plan for the year ended June 30, 2020. Our independent audit was conducted by the independent audit firm of Kendall, Prebola and Jones, LLC, with a mailing address of PO Box 259, 133 Mann Street, Bedford, PA 15522. The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in that schedule. Findings relating to federal awards, which are required to be reported in accordance with the Uniform Guidance 1. Finding Number 2020-001: DC Opportunity Scholarship Program: CFDA# 84.370C Views of Responsible Officials: Ingenuity Prep Charter School agrees with the recommendation. Planned Corrective Action: For all future procurement contracts that result in a cost of $250,000, including already planned renovations and construction projects, a formal bidding process that complies with all relevant regulations and Uniform Guidance Procurement standards to select appropriate vendors will be implemented. An evaluation will be made based upon what is most advantageous for the organization and the project including, but not limited to, price and other factors. A procurement checklist will be created and executed alongside the bidding process, as well. Anticipated Completion Date: Immediately. Responsible Individual: Ashanti Herndon, Chief Financial and Operations Officer If the cognizant or oversight agency for this audit has questions regarding this correction action plan, please call me at (202) 562-0391.