Audit 380517

Condition: The County’s procurement policy is not in compliance with the requirements set forth in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) at 2 CFR Part 200. Controls are ineffective to prevent failures in compliance with procurement requirements. Criteria: The Uniform Guidance at 2 CFR Part 200, specifically sections 200.318 to 200.326, establishes procurement standards and requirements for federal awards. The key principles include ensuring competition, maintaining written procurement policies, and avoiding conflicts of interest in procurement decisions. Effect: The lack of sufficient controls over procurement may result in noncompliance with federal requirements, potentially leading to disallowed costs, audit findings, and reduced funding. Recommendation: We recommend that the County revise its procurement policy (including internal control policies and procedures specific to the County) to align with the Uniform Guidance requirements. We also recommend the County provide its procurement policy in written form and regularly updated to each of its federal and state program managers to ensure proper compliance and consistent implementation. Response/Corrective Action Plan: We concur with the finding and will revise the procurement policy as well as the internal control policies and procedures specific to the County to be in alignment with the Uniform Guidance requirements. Upon completion, the new policy will be provided to all department heads to ensure proper compliance in the utilization and disbursement of federal funds.

Condition: Due to the size of the purchase amount, the County failed to procure through formal methods as required by 2 CFR 200.320. In addition, the County’s internal policy was not followed and was found not to comply with Uniform Guidance. Criteria: The program specifically requires that all procurement activity be conducted in accordance with the Uniform Guidance at 2 CFR Part 200, specifically section 200.320 which identifies three types of procurement methods to be used with purchases over certain dollar thresholds. For purchases in excess of $250,000, a formal procurement method is required. Formal procurement methods are competitive and require public notice. Effect: Compliance with such requirements is necessary, in our opinion, for the County to comply with the requirements applicable to that program. Recommendation: We recommend that the County revise its procurement policy to align with the Uniform Guidance requirements. We further recommend all program managers of federal programs receive training for federal program management prior to receiving and managing federal funds and review all federal program requirements including compliance requirements prior to expending the federal funds to ensure compliance with the federal program requirements. Response/Corrective Action Plan: We concur with the finding and will revise the procurement policy as well as the internal control policies and procedures specific to the County to be in alignment with the Uniform Guidance requirements. Upon completion, the new policy will be provided to all department heads to ensure proper compliance in the utilization and disbursement of federal funds.