Audit 370116

Finding 2024-004 Material Weakness in Internal Control Over Compliance and Noncompliance – Procurement, Suspension and Debarment Federal Agency: Department of the Interior Federal Program: 15.435 Gulf of Mexico Security Act of 2006 (GoMESA) Compliance Requirement: I – Procurement and Suspension & Debarment Criteria: The Uniform Guidance regulations (§200.320) require that procurement for purchases of goods and services follow certain procedures related to obtaining and awarding of contracts based on sealed bid, competitive, and non-competitive proposals. In addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering items identified in Appendix II of Part 200 of the Uniform Guidance, as applicable. Additionally, §200.318(d) provides that written policies and procedures must document the avoidance of the acquisition of unnecessary or duplicative items. Condition: During our testing of purchases under the procurement regulations, for 1 out of 2 vendors (paid approximately $156 thousand from the amount tested of $1.62 million) selected for testing, the Parish was unable to provide supporting documentation that these vendor services were procured in accordance with the standards in §200.320. Cause: The Parish does not have adequate controls in place to ensure that appropriate supporting documentation is maintained for purchases made under the procurement standards to support the Parish’s consideration and/or conclusion for obtaining and awarding contracts based on sealed bid, competitive, and non-competitive proposals. Additionally, written policies and procedures for procurement were not followed to ensure all requirements under these regulations were addressed. Effect: The Parish may not be selecting vendors with the lowest overall cost for services procured or paid with federal grant funds. Perspective: The condition noted does not indicate a pervasive or entity-wide control deficiency but is specific to this program and the related compliance requirement for Procurement and Suspension & Debarment. Questioned Costs: $156,321 Recommendation: We recommend the Parish implement internal controls to ensure that supporting documentation is maintained for the procurement of services, and review of suspension and debarment in accordance with Uniform Guidance §200.320. Additionally, we recommend the Parish enhance its written policies and procedures to ensure compliance with federal procurement requirements. View of Responsible Official: See corrective action plan.