Audit 396069

Agency: U.S. Department of Health and Human Services Federal Assistance Listing Number: 93.528, National Forum for State and Territorial Chief Executives HHS OA, Yr 10 and Yr 11, National Forum Contract Number: 2U98OA09028 Criteria: In accordance with 2 CFR §200.318(a), General Procurement Standards, the nonfederal entity must use its own documented procurement procedures which reflect applicable State, local and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, §200.318(i) states that the nonfederal entity must maintain records sufficient to detail the history of the procurement. These records are required to 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. In accordance with §200.213 and §180.300, Suspension and Debarment, nonfederal entities cannot enter into awards, subawards or contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a nonfederal entity. In addition, in accordance with §180.415(b), nonfederal entities cannot renew or extend covered transactions (other than no-cost time extension) with any excluded person or under which an excluded person is a principal, unless the nonfederal entity obtains an exception under §180.135. Condition: During our testing of the internal controls over compliance and compliance with procurement, suspension and debarment compliance requirements, we identified one procurement agreement out of a total of three tested where the Organization did not have documented controls over the application of their procurement policy. Additionally, the Organization did not retain documentation of controls over their verification that the vendor contracted was not suspended or debarred prior to entering into the contract. Management has subsequently determined that the vendor was not suspended or debarred. Questioned Costs: None. Context: The population consisted of three vendor charges or contracts entered into during the period that exceeded the Organization's micro-purchase policy. Three of the items were tested, two of which had no exceptions in testing and the other had the exceptions identified in the condition above. The one exception was paid $31,661 from the award. Cause: NGAC's personnel did not adhere to NGAC's documented policies and procedures for ensuring proper suspension and debarment validations were performed prior to entering a covered transaction and did not retain proper documentation supporting procurement controls and compliance. Effect: Failure to obtain and retain sufficient supporting documentation could result in an incorrect application of procurement policies and procedures. Failure to timely verify that a vendor is not suspended or debarred could result in transactions involving unreasonable costs or result in unintentionally entering a contract with an entity that is barred from performing work for the Federal government. Repeat Finding: This finding was identified during the year ending June 30, 2024 as finding 2024-002. Recommendation: We recommend management ensure that procurement and suspension and debarment regulations are followed. We also recommend management ensure all required procurement documentation is maintained in conjunction with its document retention policy. Management's Response: NGA management agrees with the finding and recommendations presented by Baker Tilly auditors and has developed a corrective action plan in response.