Follow-Up Audit Report On Other Than Personal Service Expenditures Of Schools Within The Department Of Education Regional Operations Center For Regions 4 And 5

AUDIT REPORT IN BRIEF

This is a follow-up audit to determine whether the Department of Education (DOE) has implemented the eight 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 4 and 5 (Audit No. MD05-067A, issued May 4, 2005). In this report, we discuss the eight recommendations from the prior audit in detail, as well as the implementation status of each recommendation.

The earlier audit determined whether DOE Other Than Personal Service (OTPS) procurement policies and procedures were followed for purchases of goods and services made by schools in Regions 4 and 5 that required Regional Operations Center (ROC) approval. In that audit, the auditors determined that the officials of the ROC and schools in Regions 4 and 5 generally followed DOE procurement policies and procedures for purchases that require ROC approval. However, there were instances of noncompliance relating to lack of certifications for goods and services, lack of justification and Office of Purchasing Management (OPM) approval for sole-source purchases, and lack of bidding documents. There were instances where payments were made prior to the delivery of goods and services. In addition, the earlier audit cited internal weaknesses such as inadequate segregation of duties.

Audit Findings and Conclusions

The current audit disclosed that DOE implemented six of the eight recommendations and partially implemented one. We could not determine the status of the remaining recommendation because the sampled purchases we reviewed did not exceed the monetary threshold that would require the approval of the OPM Administrator. We also noted a new internal control issue not cited in the previous audit: schools split purchases to avoid the approval requirements for purchases exceeding $5,000, the monetary threshold for these purchases.