Finding 2023-001: Procurement Policy
Information on the Federal Program: All
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non
Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and
the terms and conditions of the Federal award. These internal controls should be in compliance with
guidance in Standards for Internal Control in the Federal Government issued by the Comptroller
General of the United States or the internal Control Integrated Framework, issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR
§200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail
the history of procurement. These records will include, but are not necessarily limited to, the
following: Rationale for the method of procurement, selection of contract type, contractor selection or
rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D
200.319 Procurement Standards. All procurement transactions for the acquisition of property or
services required under a Federal award must be conducted in a manner providing full and open
competition consistent with the standards of this section and §200.320. The non-Federal entity must
have written procedures for procurement transactions."
Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must
maintain records sufficient to detail the history of procurement. These records will include, but are not
necessarily limited to, the following: Rationale for the method of procurement, selection of contract
type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter
II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the
acquisition of property or services required under a Federal award must be conducted in a manner
providing full and open competition consistent with the standards of this section and §200.320. The
non-Federal entity must have written procedures for procurement transactions.
Condition: During our testing performed over procurement and through inquiries with management,
we noted the Organization does not have a formally documented procurement policy in place that is
consistent with 2 CFR §200.318(a).
Cause: Management has not formalized and implemented an official organizational procurement
policy.
Effect or Potential Effect: An official procurement policy will outline specified thresholds for which
procurement is required, required documentation needed for each threshold, and individuals
responsible for ensuring procurement is performed in all required circumstances. When no policy is
in place, there is a risk that procurement would not be performed, or adequate documentation would
not be obtained, when required.
Questioned Costs: None noted.
Context: We noted that the Organization does not have a documented procurement policy in effect.Identification as a Repeat Finding, if Applicable: Not a repeat finding.
Recommendation: We recommend that management formalize and implement an official
procurement policy. This policy should include thresholds for which various levels of procurement are
required. The policy should also include what documentation is required for each level of
procurement. Additionally, the policy should specify individuals responsible for conducting
procurement, and approving the final selection.
Finding 2023-002: Pre-Award Risk Assessment for Sub-Recipient
Information on the Federal Program: 93.048
Criteria: As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each
subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions
of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to
prescribe to each individual subrecipient.
Condition: During our testing performed over subrecipient expenditures, we were unable to obtain
evidence that pre-award risk assessment procedures were performed over subrecipients, consistent
with 2 CFR §200.332(b).
Cause: The Organization's internal policies and procedures governing risk assessment on
subrecipients was not performed.
Effect or Potential Effect: The Organization could inadvertently be engaged in relationships with
subrecipients of higher risk without the appropriate level of oversight to ensure subrecipients are
expending funds in accordance with the provisions and terms of the subaward.
Questioned Costs: None noted.
Context: Our audit procedures consisted of substantive testwork over a sample of subrecipients. We
consider our sample to be representative of the population. The samples were made using statistical
sampling and we believe the condition appeared to be systematic in nature.
Identification as a Repeat Finding, if Applicable: Not a repeat finding.
Recommendation: We recommend that the Organization follow their internal policies regarding
performing a pre-award risk assessment on all new sub-recipients engaged throughout the life of the
award. For repeat sub-recipients, the risk assessment should be re-visited throughout the award term
to ensure that conditions have not changed and the original risk assessment remains reasonable.
Finding 2023-001: Procurement Policy
Information on the Federal Program: All
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non
Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and
the terms and conditions of the Federal award. These internal controls should be in compliance with
guidance in Standards for Internal Control in the Federal Government issued by the Comptroller
General of the United States or the internal Control Integrated Framework, issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR
§200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail
the history of procurement. These records will include, but are not necessarily limited to, the
following: Rationale for the method of procurement, selection of contract type, contractor selection or
rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D
200.319 Procurement Standards. All procurement transactions for the acquisition of property or
services required under a Federal award must be conducted in a manner providing full and open
competition consistent with the standards of this section and §200.320. The non-Federal entity must
have written procedures for procurement transactions."
Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must
maintain records sufficient to detail the history of procurement. These records will include, but are not
necessarily limited to, the following: Rationale for the method of procurement, selection of contract
type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter
II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the
acquisition of property or services required under a Federal award must be conducted in a manner
providing full and open competition consistent with the standards of this section and §200.320. The
non-Federal entity must have written procedures for procurement transactions.
Condition: During our testing performed over procurement and through inquiries with management,
we noted the Organization does not have a formally documented procurement policy in place that is
consistent with 2 CFR §200.318(a).
Cause: Management has not formalized and implemented an official organizational procurement
policy.
Effect or Potential Effect: An official procurement policy will outline specified thresholds for which
procurement is required, required documentation needed for each threshold, and individuals
responsible for ensuring procurement is performed in all required circumstances. When no policy is
in place, there is a risk that procurement would not be performed, or adequate documentation would
not be obtained, when required.
Questioned Costs: None noted.
Context: We noted that the Organization does not have a documented procurement policy in effect.Identification as a Repeat Finding, if Applicable: Not a repeat finding.
Recommendation: We recommend that management formalize and implement an official
procurement policy. This policy should include thresholds for which various levels of procurement are
required. The policy should also include what documentation is required for each level of
procurement. Additionally, the policy should specify individuals responsible for conducting
procurement, and approving the final selection.
Finding 2023-002: Pre-Award Risk Assessment for Sub-Recipient
Information on the Federal Program: 93.048
Criteria: As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each
subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions
of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to
prescribe to each individual subrecipient.
Condition: During our testing performed over subrecipient expenditures, we were unable to obtain
evidence that pre-award risk assessment procedures were performed over subrecipients, consistent
with 2 CFR §200.332(b).
Cause: The Organization's internal policies and procedures governing risk assessment on
subrecipients was not performed.
Effect or Potential Effect: The Organization could inadvertently be engaged in relationships with
subrecipients of higher risk without the appropriate level of oversight to ensure subrecipients are
expending funds in accordance with the provisions and terms of the subaward.
Questioned Costs: None noted.
Context: Our audit procedures consisted of substantive testwork over a sample of subrecipients. We
consider our sample to be representative of the population. The samples were made using statistical
sampling and we believe the condition appeared to be systematic in nature.
Identification as a Repeat Finding, if Applicable: Not a repeat finding.
Recommendation: We recommend that the Organization follow their internal policies regarding
performing a pre-award risk assessment on all new sub-recipients engaged throughout the life of the
award. For repeat sub-recipients, the risk assessment should be re-visited throughout the award term
to ensure that conditions have not changed and the original risk assessment remains reasonable.