Federal Agency: Department of Treasury Federal Program: COVID- 19 - Coronavirus State and Local Fiscal Recovery Funds Federal Assistance Listing Number: 21.027 Criteria: Under 2 CFR §§ 200.318 through 200.327, non-Federal entities expending federal awards must establish and follow written procurement procedures that comply with the Uniform Guidance procurement standards. At a minimum, written procurement policies should address standards of conduct, methods of procurement, competition requirements, documentation of procurement actions, cost or price analysis when applicable, suspension and debarment requirements, and contract provisions required by Appendix II to 2 CFR Part 200. Statement of Condition: During our testing, we noted that the Association's written procurement policy did not incorporate all applicable Uniform Guidance procurement requirements. Specifically, the policy did not adequately address procurement methods and dollar thresholds, suspension and debarment verification, and required contract provisions. As a result, the Association's written policy was not fully consistent with the requirements of 2 CFR Part 200. Cause: Management had not updated the Association's procurement policy to reflect the current Uniform Guidance procurement requirements applicable to federal awards. Consequently, the policy did not provide personnel with complete guidance for administering federally funded procurements. Effect: An incomplete procurement policy increases the risk that procurements funded with federal awards may not be conducted in accordance with Uniform Guidance requirements. This could result in noncompliance with federal regulations and increase the risk of questioned costs or other administrative remedies by the federal awarding agency or pass-through entity. Context: The Association’s procurement policy in effect during the audit period governed purchases made with federal award funds; however, the policy did not incorporate all applicable federal procurement requirements under the Uniform Guidance. As a result, procurements made with federal funds during the audit period were subject to policies and procedures that did not fully conform to the applicable Federal procurement standards. Questioned Costs: None. Recommendation: We recommend that management revise and formally adopt a procurement policy that fully incorporates the procurement requirements of 2 CFR §§ 200.317 through 200.327. The revised policy should address all applicable procurement methods, competition requirements, documentation standards, suspension and debarment procedures, and required federal contract provisions. In addition, management should provide training to personnel responsible for procurement activities to ensure consistent application of the updated policy. Management Response: Management acknowledges the auditor's recommendation regarding the enhancement of the Association's procurement policies to ensure full compliance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR §§ 200.317–200.327). The Association has initiated a comprehensive review of its existing procurement policies and procedures to ensure they fully incorporate all applicable federal procurement requirements. The revised policy will include provisions addressing procurement methods based on established dollar thresholds, competition requirements, documentation and record retention standards, contractor responsibility determinations, suspension and debarment verification, conflict of interest requirements, and all required federal contract provisions applicable to federally funded awards. Management will also establish standardized procurement documentation and review procedures to promote consistent application of the policy and to ensure compliance is adequately documented for all applicable purchases funded through federal awards. In addition, personnel responsible for procurement and grant administration will receive training on the updated procurement policy and the requirements of 2 CFR Part 200. This training will emphasize proper procurement planning, documentation, competitive purchasing requirements, and compliance with federal regulations to ensure consistent implementation throughout the organization. Management is committed to maintaining strong internal controls over federal awards and will periodically review procurement practices to ensure ongoing compliance with Uniform Guidance requirements.