Audit 402332

Federal Agency: Legal Services Corporation (LSC) Federal Program Name: LSC Grants Assistance Listing Number: 09.436183 Federal Award Identification Number and Year: 09.436183 - 2025 Award Period: January 1, 2025 – December 31, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Under 2 CFR § 180.300, a participant must verify that a vendor is not excluded before entering into a covered transaction. These requirements are intended to ensure that Federal funds are not awarded to suspended or debarred parties at the time the covered transaction is executed. Condition: The Organization performed periodic suspension and debarment checks of vendors throughout the year, however, the Organization did not consistently verify that vendors were not suspended or debarred prior to entering into covered transactions, as required. Questioned costs: None Context: In a sample of 5, 3 vendors were not verified before the contract was executed for suspension and debarment. The Organization maintained a practice of periodically reviewing all vendors against SAM.gov during the fiscal year. These periodic reviews did not identify any vendors that were suspended or debarred during the audit period. Cause: Procedures emphasized periodic monitoring rather than pre‑award verification required by federal regulations. Effect: Because suspension and debarment verification was not performed before entering into covered transactions, the Organization did not comply with 2 CFR § 180.300. While no suspended or debarred vendors were identified through subsequent reviews, the lack of a pre‑award verification control increased the risk that Federal funds could be obligated to an ineligible party. Repeat Finding: No Recommendation: We recommend that the Organization update its procurement and vendor approval procedures to require documented suspension and debarment verification prior to entering into covered transactions, in accordance with 2 CFR § 180.300. Documentation of the verification should be retained in the procurement or contract file to demonstrate compliance. Views of responsible officials: There is no disagreement with this audit finding.