Ohio Auditor of State Update No ve mb e r 6, 2019 Auditor of - PDF document

11/12/2019 Ohio Auditor of State Update No ve mb e r 6, 2019 Auditor of State Update Pro c ure me nt – Unifo rm Guida nc e pro c ure me nt upda te s we re disc usse d in prio r ye a r AOS upda te , re c a p a nd disc uss furthe r c ha ng e s/ inte rpre ta tio ns. HB 291 – E ve rything yo u ne e d to kno w a b o ut insura nc e po lic ie s vs sure ty b o nds. Stude nt We llne ss a nd suc c e ss F unds – we re inc lude d in the re c e nt b udg e t b ill fund. Wha t a re the y a nd why sho uld we c a re . (a lso b rie fly no te o the r b udg e t b ill ite ms) Othe r Ge ne ra l AOS upda te s – b rie fly disc uss ne w a dministra tio n initia tive s a nd c ha ng e s. 2 Pr oc ur e me nt As a re minde r the g ra c e pe rio d fo r imple me nting the Unifo rm Guida nc e pro c ure me nt re q uire me nts ha s e nde d All e ntitie s sho uld no w b e fo llo wing the Unifo rm Guida nc e Re q uire me nts 3 1

11/12/2019 Pr oc ur e me nt Me thods (2 CF R 200.320) Mic ro -Purc hase ($3,500) No nc o mpe titive Small Purc hase Pro po sal (be twe e n $3,500 and $150,000) *must me e t c rite ria to use Co mpe titive Se ale d Bid s Pro po sal ($150,000) ($150,000) 4 NDAA 2018 • Sinc e Unifo rm Guida nc e ha s b e c o me e ffe c tive , the re a re two diffe re nt a c ts tha t ha ve b e e n pa sse d tha t impa c t pro c ure me nt. • Na tio na l De fe nse Autho riza tio n Ac t(NDAA) o f 2017 a nd 2018. • NDAA 2018 ra ise s the mirc o -purc ha se thre sho ld to $10,000 a nd the simplifie d a c q uisitio n thre sho ld to $250,000. T his is a pplic a b le fo r a ll e ntitie s. • Unifo rm Guida nc e is in the pro c e ss o f b e ing upda te d fo r the se c ha ng e s, b ut OMB g ra nte d e ntitie s a n e xc e ptio n a llo wing re c ipie nts to use the hig he r thre sho ld prio r to the c ha ng e s b e ing ma de . T his ne e ds to b e do c ume nte d. 5 Pr oc ur e me nt Polic ie s Re q uire me nts a re do c ume nte d in 2 CF R 200.318. No n-fe de ra l e ntitie s do c ume nte d pro c ure me nt pro c e dure s MUST : •Co ve r c o nflic ts o f inte re st fo r b o th the e mplo ye e a nd o rg a niza tio n. •Avo id a c q uisitio n o f unne c e ssa ry o r duplic a tive ite ms. •Awa rd c o ntra c ts o nly to re spo nsib le c o ntra c to rs po sse ssing the a b ility to pe rfo rm suc c e ssfully unde r the te rms a nd c o nditio ns o f a pro po se d pro c ure me nt. •Ma inta in re c o rds suffic ie nt to de ta il the histo ry o f pro c ure me nt—ra tio na le fo r the me tho d, se le c tio n o f c o ntra c t type , c o ntra c to r se le c tio n o r re je c tio n, a nd the b a sis fo r pric e . 6 2

11/12/2019 Pr oc ur e me nt Polic ie s 2 CF R 200.318 (a ) sta te s the no n- fe de ra l e ntity MUST use its o wn do c ume nt pro c ure me nt pro c e dure s • T he se pro c e dure s ne e d to b e spe c ific to the e ntity • So me ite ms tha t sho uld b e inc lude d in the se pro c e dure s the de finitio n o f a g g re g a te , ho w ma ny q uo te s, ho w the y will de te rmine if the re a re fe de ra l funds invo lve d in the purc ha se , a nd if the y a re pla nning o n ta king a dva nta g e o f the hig he r thre sho lds in NDAA 2018 7 Pr oc ur e me nt with E SCs T he re ha s b e e n muc h ta lk in this a re a o ve r the pa st ye a r o n if E SC c o ntra c ts a re sub je c t to the fe de ra l pro c ure me nt la ws T he o nly ite ms e xe mpt fro m pro c ure me nt a re pa yro ll a nd indire c t c o sts, sinc e E SC c o ntra c ts a re fo r purc ha se d se rvic e s the y wo uld no t b e e xe mpt 8 Pr oc ur e me nt with E SCs Ho use Bill 166 pa sse d o n July 18, 2019 a nd inc lude s a me nding la ng ua g e to ORC 3313.843 whic h e xe mpts a sc ho o l distric t o r po litic a l sub divisio n tha t ha s e nte re d into a n a g re e me nt with a n E SC fro m c o mpe titive b idding re q uire me nts 9 3

11/12/2019 Pr oc ur e me nt F AQs Do e s the g o ve rning b o dy ne e d to a ppro ve the po lic y? No, but it is a be st pr ac tic e . Ca n a diffe re nt thre sho ld b e use d? : Ye s- UG r e quir e me nts ar e maximums, so a mor e r e str ic te d thr e shold c an be appr ove d. Wha t if a n e ntity is no t sure wha t the c o st will b e , wha t pro c ure me nt me tho d sho uld b e use d? E ntity should r e asonably e stimate the c ost and use the appr opr iate pr oc ur e me nt me thod. Also, this should be addr e sse d in the pr oc ur e me nt polic y. Wha t if the e ntity is no t sure wha t type o f funding (F e de ra l o r no n- F e de ra l) is g o ing to b e use d? Be st way to tr e at the tr ansac tion is if it will be F e de r al and follow the applic able pr oc ur e me nt r ule s. 10 Pr oc ur e me nt F AQs Wha t if a c ha ng e o rde r re sults in the purc ha se mo ving to a ne w thre sho ld? E ntity should r e asonably e stimate the c ost and use the appr opr iate pr oc ur e me nt me thod. Also, this should be addr e sse d in the pr oc ur e me nt polic y. Wha t if a n e ntity is using a third-pa rty c o ntra c to r fo r pro c ure me nt, who is re spo nsib le fo r the pro c ure me nt re q uire me nts? T he e ntity is r e sponsible for monitor ing c omplianc e with the pr oc ur e me nt r e quir e me nts. Non-c omplianc e dur ing te sting would be r e por te d in the e ntity’s single audit. Communic ation be twe e n the e ntity and thir d-par ty is ke y and the e ntity should know what me thods for c omplying with the pr oc ur e me nt r e quir e me nts the thir d-par ty has in plac e and it should be spe c ifie d in any c ontr ac t be twe e n the par tie s. 11 HB 291 E ffe c tive da te : Ma rc h 20, 2019 Ne w le g isla tio n lo c a tio n: Ohio Re v. Co de § 3.061 Othe r re le va nt a me nde d se c tio ns: • T ra ditio na l sc ho o l distric ts • 3313.25 T re a sure r • 3319.05 Busine ss Ma na g e r • Co mmunity sc ho o ls • 3314.011 F isc a l Offic e r 12 4

11/12/2019 HB 291 Applic a b le to b o th tra ditio na l sc ho o l distric ts a nd c o mmunity sc ho o ls An "E mplo ye e disho ne sty a nd fa ithful pe rfo rma nc e o f duty po lic y" • I s de fine d a s a po lic y o f insura nc e to pro te c t a sc ho o l fro m fina nc ia l o r pro pe rty lo ss c a use d b y the fra udule nt o r disho ne st a c tio ns o f, a nd the fa ilure to pe rfo rm a duty pre sc rib e d b y la w fo r, a n o ffic e r, e mplo ye e , o r a ppo inte e tha t is o the rwise re q uire d b y la w to g ive a n individua l sure ty b o nd b e fo re e nte ring upo n the disc ha rg e o f o ffic ia l dutie s. • Ma y b e a do pte d b y po lic y, b y o rdina nc e o r re so lutio n, fo r use ra the r tha n a sure ty b o nd, fo r tho se tha t wo uld o the rwise b e re q uire d to g ive o ne . • Must b e in e ffe c t a nd a pply to the individua l b e fo re the b e g inning o f the ir te rm o f o ffic e . A la c k o f c o ve ra g e o n the da te o n whic h the disc ha rg e o f dutie s a re c o mme nc e d b y the individua l sha ll re nde r the o ffic e va c a nt a nd it sha ll b e fille d a s re q uire d b y la w. 13 HB 291 If suc h a po lic y is a do pte d, a ll o f the fo llo wing a pply: • T he individua l sha ll b e c o nside re d q ua lifie d to ho ld the o ffic e o r e mplo yme nt, witho ut g iving b o nd, o n the da te the o a th o f o ffic e is ta ke n, c e rtifie d, a nd file d a s re q uire d b y la w. • T he individua l sha ll b e e ntitle d to e nte r upo n the dutie s o f the o ffic e o r e mplo yme nt whe n the po lic y is in e ffe c t a nd the o a th is file d. • Any individua l who wo uld o the rwise b e re q uire d to file a b o nd b e fo re c o mme nc ing the disc ha rg e o f dutie s sha ll b e c o ve re d b y a nd a re sub je c t to the po lic y inste a d o f a sure ty b o nd re q uire me nt. • T he c o ve ra g e a mo unt fo r a n individua l sha ll b e e q ua l to o r g re a te r tha n the ma ximum a mo unt o f the b o nd o the rwise re q uire d b y la w (o r a n a mo unt a g re e d to b y the b o a rd if no sta tuto ry re q uire me nt a mo unt). If no suc h po lic y is a do pte d: • T he sc ho o l must c o ntinue to use sure ty b o nds a s o the rwise re q uire d b y Ohio . Re v. Co de . 14 HB 291 Cha ng e s to a udit te sts a nd re q uire me nts: • Audito rs c urre ntly te st sure ty b o nd c o mplia nc e (in OCS Ch. 3), c ha ng e s will b e ma de to mo dify o r re mo ve this te sting in future pe rio ds. • Audito rs c urre ntly pe rfo rm so me risk ma na g e me nt a na lysis, inc luding e va lua tio n o f insura nc e c o ve ra g e s. T he y will c o ntinue to do so inc luding so me a na lysis o f a ny po lic ie s o b ta ine d in lie u o f sure ty b o nds. • Ab se nc e o f sure ty b o nds o r insura nc e c o ve ra g e will re sult in c o mme nts in the Ma na g e me nt L e tte r o r sc he dule o f finding s b a se d o n a udito r judg e me nt o f the lo ss risk e xpo sure . 15 5