COLLABORATIVE FOR CHILDREN

Finding #2024-002 – Material Weakness and Other Noncompliance. Applicable federal program: U. S. Department of Treasury, Passed through Harris County, COVID-19 – Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing #: 21.027, Contract Number: SLFRFP1966, Contract Year: 05/16/23 – 05/15/25. Criteria: Procurement – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.318 states that agencies must maintain records sufficient to detail the history of each procurement transaction, including the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Additionally, federal regulations require that agencies have controls in place to prevent contracting with parties that are suspended or debarred. Condition and context: During our testing of 4 of 12 vendors with contracts meeting the threshold for procurement, CFC was unable to provide evidence of procurement for 3 of the vendor contracts, summing to $132,300. Additionally, CFC’s procurement policy does not include procedures to verify that vendors are not suspended, debarred, or otherwise excluded. Cause: CFC staff failed to follow its written policy to obtain and retain the documentation of procurement procedures and the written policy does not include a procedure to verify vendors are not suspended or debarred. Effect: Failure to follow established procurement policies may result in CFC purchasing goods or services for more than would be necessary if required competitive procurement procedures had been followed. Questioned costs: None. Recommendation: Provide additional training to program and finance personnel on the required procurement processes using updated written procurement policies and procedures and emphasize adherence to these policies and procedures. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.

Finding #2023-002 – Material Weakness and Material Noncompliance. Applicable federal program: U. S. Department of Health and Human Services, Passed through the Texas Workforce Commission, Child Care and Development Block Grant, Child Care Business Training, Assistance Listing #: 93.575, Contract Number: 2920CCQ002, Contract Year: 12/01/19 – 06/30/24. Criteria: Allowable costs – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.406 requires that allowable costs should be net of all applicable credits, including adjustments of overpayments and erroneous charges. To the extent that any credits accruing to or received by the non-Federal entity relate to allowable costs, they must be credited to the Federal award either as a cost reduction or cash refund, as appropriate. Condition and context: Five vendor invoices totaling $137,893 representing professional services provided in 2022 were disputed by CFC due to lack of performance on the part of the vendor. These invoices were billed to Texas Workforce Commission (TWC) in 2022 under the Child Care Business Training contract, but had not yet been paid to the vendor by CFC. The invoices were subsequently credited by the vendor, but not credited back to TWC by CFC, resulting in an amount owed to TWC by CFC of $137,893 at December 31, 2023. Cause: The finding occurred as a result of an error made in reversing unpaid invoices from the accounting records without crediting the TWC contract for the amounts reversed. Effect: Amounts reimbursed by TWC to CFC under the Child Care Business Training contract are overstated by $137,893. Questioned costs: $137,893. Recommendation: CFC should implement policies and procedures to ensure that any applicable credits be credited to the Federal award either as a cost reduction or cash refund, as appropriate. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.