Follow-Up Audit Report on Other Than Personal Service Expenditures of Schools within the Department of Education Regional Operations Center for Regions 6 and 7

AUDIT REPORT IN BRIEF

This follow-up audit determined whether the Department of Education (DOE) implemented the seven recommendations made in a previous audit entitled Audit Report on Other Than Personal Service Expenditures of Schools within Regional Operations Center for Region 6 and 7 (Audit No. MH05-069A, issued May 4, 2005). In this report, we discuss the seven 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 6 and 7 that required Regional Operations Center (ROC) approval. In that audit, the auditors determined that the officials for the ROC and schools in regions 6 and 7 generally followed DOE procurement policies and procedures for purchases that required ROC approval with the exception of the following: ROC officials did not receive required certifications of delivery; did not ensure that there were written justifications for all three bid and sole source purchases; did not ensure purchases were approved by the Office of Procurement Management (OPM); did not obtain documentation for all bidding purchases; and obtained approval after goods and services were purchased.

Audit Findings and Conclusions

Of the seven recommendations made in the previous audit, the current audit disclosed that DOE partially implemented four. It has fully implemented the three recommendations that dealt with: ensuring compliance with the DOE Standard Operating Procedures Manual for sole-source professional service purchases of between $5,000.01 and $10,000; maintaining copies of bid documentation; and approving non-contracted purchases exceeding $10,000 only after receiving sufficient evidence that sealed bids were obtained and read at a public opening. During the current audit, we identified three new issues. DOE did not enter certification of delivery of purchases on-line as prescribed; did not assign appropriate on-line access to staff responsible for entering certification of delivery in the DOE Financial Accounting Management Information Systems (FAMIS); and incorrectly coded purchase orders.

Audit Recommendations

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

• Ensure that certification of delivery for purchases of goods and services is obtained prior to payment of invoices.

• Ensure that written justification for all sole-source purchases is maintained.

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

• Notify all schools that purchases requiring DOE approval must not be made until they receive those approvals.

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

• Ensure that the dates in FAMIS coincide with the dates of certifications of delivery.

• Grant appropriate levels of on-line access to DOE personnel performing the on-line certification-of-delivery procedure.

• Ensure that purchase orders are correctly coded when entered in FAMIS.