Audit 411360

Finding 2025-001 – Procurement, Suspension, and Debarment Program Name (ALN): Research and Development Cluster – various Assistance Listing Numbers Federal Agency: Multiple Federal Grant Numbers and Years: Multiple Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample Finding Type: Significant Deficiency and Material Noncompliance Repeat Finding: No Criteria: Suspension and Debarment Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR 180.300). Non-federal entities receiving contracts from the federal government are required to comply with the contract clause at FAR 52.209-6 before entering into a subcontract that will exceed $30,000, other than a subcontract for a commercially available off-the-shelf item. Condition: For one of the two samples selected for Suspension and Debarment testing, the Partnership to End Addiction (the Partnership) did not verify whether the vendor was suspended, debarred, prior to entering into the covered transaction. Cause: The Partnership’s policies and procedures were not designed at a precise enough level to ensure that, prior to entering into a covered transaction, a vendor was verified to not be suspended or debarred, or to obtain the required certification from the entity, or include the clause in the contract with the vendor. Specifically, the procedures did not establish a requirement for suspension and debarment checks over vendors with prior established relationships or employment history with the organization. Possible Asserted Effect: Failure to verify vendor eligibility prior to entering a covered transaction increases the risk that federal award funds could be disbursed to suspended, debarred, or otherwise excluded parties, which could result in non-compliance with federal regulations and unallowable questioned costs. Questioned Costs: None noted. Recommendation: We recommend that the Partnership update and strengthen its procurement policies and procedures to require suspension and debarment verification for all covered transactions, without exception for prior relationships or employment history. Alternately, the Partnership should obtain a certification from the entity or add a clause to its standard terms and conditions. Views of Responsible Officials: Management concurs with the finding above and recognizes the importance of maintaining compliance with federal award requirements.