WORKFORCE SOLUTIONS MIDDLE RIO GRANDELocal Government

We recommend that management strengthen internal controls over federal program expenditures by implementing documented pre-approval and review procedures to verify that all costs charged to federal awards are allowable, allocable, reasonable, and adequately supported in accordance with Uniform Guidance requirements and the terms and conditions of the award. We further recommend that management determine the appropriate disposition of the $94,658 expenditure, including reimbursement to the federal program if required, and provide additional training to personnel responsible for approving and charging expenditures to federal awards.

Finding 2022-002 ? Procurement Type of Finding: Significant Deficiency/Non-Compliance Assistance Listing Number: 93.575 (Child Care Quality Improvement) Criteria: Uniform Guidance ECFR ?200.320 Methods of procurement to be followed, requires price or rate quotations be obtained from an adequate number of qualified sources, as determined by the non-federal entity, for the acquisition of goods or services greater than the micro-purchase threshold of $50,000 but less than the simplified acquisition threshold of $250,000. The WSMRG?s procurement policies in effect April 2022 contain similar requirements for purchases between $25,000 and $250,000. Additionally, TWC Financial Manual for Grants and Contracts (FMGC) Supplement on procurement contains similar requirements and additional guidance including purchases made through purchase Coops. Condition: The Board paid $89,469 to a vendor for educational curriculum learning materials to be used by the various child care providers. The purchase did not comply with the above-mentioned regulations/policies. As noted below: ? The Board did not utilize its fiscal agent to make the procurement but instead purchased the materials directly from the vendor. ? No written price quotes were obtained from other vendors for similar curriculum materials. ? Purchasing documentation provided referenced a BuyBoard contract. However, the purchase order was not processed through the BuyBoard as required. ? The vendor charged shipping costs of 15% of the cost of the materials. $11,670 of the total amount paid were shipping charges. These charges appear unreasonable in that the vendor charges 10% to Texas clients as per documentation submitted by the vendor to BuyBoard. ? We noted that the same products purchased appear to have been available through Amazon at lower prices and at zero shipping costs. ? Lastly, our review of the procurement noted some inconsistencies with FMGC regulations. Effect: The primary effect of the condition was that the procurement was not competitively procured and the best possible price may not have been obtained. Cause: Board established policies and internal control were not adhered to at the various stages of the procurement process. Recommendation: We recommend the Board review its current policies over procurement. Staff should be required to utilize the systems and policies in existence. The Board should monitor compliance with policies and internal control to ensure compliance. Additionally, staff responsible of the procurement function should obtain training and education on an annual basis.

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