Audit 393224

Suspension and Debarment Control Every Student Succeeds Act/Preschool Development Grants FFAL #93.434 Passed through from the Oklahoma Department of Human Services Suspension and Debarment Significant Deficiency in Internal Control Over Compliance Criteria: Per 2 CFR 200.214, non federal entities must not enter into covered transactions with parties that are suspended or debarred. Acceptable verification methods include: • Checking the Exclusions section of SAM.gov, • Collecting vendor certifications regarding suspension/debarment status, or • Including appropriate suspension and debarment clauses in contracts. Internal controls must ensure these verifications are performed and documented. Condition: While a control appears to be in place for suspension and debarment, the Foundation could not support a control to verify whether all vendors paid with federal funds were suspended or debarred from participating in federal programs prior to entering into those transactions. For one procurement transactions selected for testing, the Foundation did not perform or document and retain any suspension and debarment verification procedures, such as checking SAM.gov, obtaining vendor certifications, or including suspension/debarment clauses in contracts. Cause: While the Foundation has established a formal internal control process to ensure suspension and debarment checks are performed before entering into covered transactions, it appears that not applicable transactions were captured in this process. Effect: The absence of a control that captures all applicable transactions creates a possibility that suspension and debarment requirements could occur and not be prevented or detected. Although no suspended or debarred vendors were identified through auditor performed SAM.gov searches, the deficiency increases the risk of entering into prohibited transactions in future periods. Context: We tested 1 vendor with procurement transactions totaling approximately $283,800 in federal expenditures. The Foundation did not maintain evidence of suspension and debarment verification for the one vendor tested. Independent auditor verification through SAM.gov confirmed that the vendor tested was not suspended or debarred. Nonstatistical sampling was used.Repeat Finding From Prior Year: No Questioned Costs: None, no vendor was listed as suspended or debarred. Recommendation: We recommend that The Foundation establish, document, and implement formal controls to ensure suspension and debarment verifications are completed prior to awarding covered transactions. Controls may include: • Performing and retaining SAM.gov verification printouts; • Obtaining annual or per transaction vendor certification statements; or • Incorporating a suspension and debarment clause into procurement contracts. Views of Responsible Officials: We do agree with the finding on suspension and debarment control on the FY2025 audit and have modified our procedures to include all covered transactions moving forward.