Audit Report on Other Than Personal Services Expenditures of Schools within the Department Education Regional Operations Center for Regions 4 and 5

Audit Report In Brief

The audit determined whether the Department of Education’s (DOE) procurement policies and procedures were followed for goods and services purchased by schools in Regions 4 and 5 that require Regional Operations Center (ROC) approval.

Based on the documentation provided, we found that officials of the ROC and schools of Regions 4 and 5 generally did follow DOE’s procurement policies and procedures for purchases that required ROC approval. Specifically:

• Other Than Personal Services (OTPS) purchases were reasonable and necessary for the operation of the schools. Equipment items purchased were found to be in use at the schools;
• Purchase orders were properly prepared and contained appropriate authorizations;
• Vendor invoices were on file to substantiate the amount paid; and
• Funds were encumbered before receipt of goods and services.

However, our review disclosed the following weaknesses:

• ROC officials did not receive required certification of delivery for three (8%) of 37 sampled purchases before processing their payments.
• ROC officials did not ensure that there was adequate written justification or approval from the Administrator of OPM (the DOE Office of Purchasing Management) for two of the nine sole-source purchases in our sample.
• For two (33%) of the six sampled purchases of goods and services for which schools were required to obtain written bids, ROC employees approved the related purchase orders without receiving the bidding documentation to support the purchases.
• The ROC processed two payments for services, totaling $25,500, before the services were rendered.
• The ROC did not adequately segregate the responsibilities for approving purchase orders from processing payments for vendor invoices. In addition, there was a lack of supervision over the ROC invoice processing function.

Based on our findings, we make eight recommendations, including the following:

• ROC officials should obtain certification of delivery for purchases of goods and services prior to payment of invoices.
• ROC officials should review solicited written bids to ensure compliance with the bidding guidelines before approving purchase orders.
• ROC officials should maintain copies of bid documentation.