Follow-Up Audit Report on Other Than Personal Service Expenditures of Schools within the Department of Education Regional Operations Center for Regions 1 and 2

AUDIT REPORT IN BRIEF

This follow-up audit determined whether the Department of Education (DOE) has implemented the 10 recommendations made in a previous audit entitled Audit Report on Other Than Personal Services Expenditures of School within the Department of Education Regional Operations Center for Regions 1 and 2 (Audit No. MH05-079A, issued May 4, 2005). In this report, we discuss the recommendations from the prior audit in detail, as well as the implementation status of each recommendation.

The earlier audit determined whether DOE procurement policies and procedures were followed for purchases of goods and services made by schools in Regions 1 and 2 that required Regional Operations Center (ROC) ¹ approval. In that audit, the auditors determined that the officials of the ROC and schools in Regions 1 and 2 did not follow DOE procurement policies and procedures for purchases that require ROC approval. Specifically, there were instances of noncompliance relating to lack of documentation on file to support purchases; lack of certifications of delivery for goods and services; lack of justification and Office of Purchasing Management (OPM) approval for sole-source purchases; and lack of bidding documents. Also lacking were vendor invoices, purchases made from non-contracted vendors contrary to DOE’s Standard Operating Procedures Manual requirements, and purchases made prior to obtaining ROC approval.

Audit Findings and Conclusions

Of the 10 recommendations made in the previous audit, the current audit disclosed that DOE implemented 4, and partially implemented 3 recommendations. The auditors could not determine the implementation status of 3 recommendations because the schools in our sample for the current audit did not make sole-source purchases exceeding the monetary threshold that would require OPM Administrator approval and because they did not purchase the items specified in the recommendation made in the prior report. We also noted several new issues not cited in the previous audit: DOE did not enter certifications of delivery in the DOE Financial Accounting Management Information Systems (FAMIS) in a timely manner; DOE incorrectly coded purchase orders; and schools split purchases to avoid the approval requirements for purchases exceeding $5,000, the monetary threshold for these purchases.

Audit Recommendations

To address the outstanding issues from the previous audit that still exist, we recommend that DOE officials:

• Obtain certification of delivery for purchases of goods and services prior to payment of invoices.

• Review solicited written bids to ensure compliance with the bidding guidelines before approving purchase orders.

• Maintain copies of bid documentation.

To address new issues identified in this audit, we recommend that DOE officials should ensure that:

• Certification of delivery is entered in FAMIS on a timely manner.

• Schools correctly classify all purchase orders.

• Schools do not avoid the approval process by splitting the value of purchases.