Audit 412813

Finding number 2025-001, significant deficiency in internal controls over major federal programs – suspension and debarment verification not performed Federal Agency: U.S. Department of Justice Pass-through entity: Pennsylvania Commission on Crime and Delinquency Federal Program: Crime Victim Assistance, ALN 16.575 Criteria: Under the Uniform Guidance compliance requirement for Procurement and Suspension and Debarment, recipients must establish and follow written procurement procedures that conform to applicable federal statutes and the requirements identified in 2 CFR Part 200. Contracts and subawards under covered transactions must not be made with parties listed in the General Services Administration's System for Award Management (SAM) Exclusions. Condition: The Institute does not have formal written policies or procedures addressing suspension and debarment requirements applicable to covered transactions under federal awards. Specifically, the Institute's procurement policies do not require personnel to: • Determine whether a transaction is a covered transaction subject to suspension and debarment requirements; • Verify vendors or contractors against SAM Exclusions prior to entering into covered transactions; • Retain documentation of SAM Exclusions searches or other allowable verification procedures in the procurement or grant file; and • Assign responsibility for performing and reviewing suspension and debarment verification. Although management indicated that staff generally use vendors known to the Institute, no formal control has been established requiring suspension and debarment verification before covered transactions are executed. Cause: The Institute does not have a procurement policy that incorporates the suspension and debarment compliance requirements applicable to federal awards. Effect: Without formal written suspension and debarment procedures, the Institute may enter into covered transactions with parties that are suspended, debarred or otherwise excluded from participation in federal programs. Such transactions could result in noncompliance with federal award requirements and may expose the Institute to disallowed costs, repayment obligations or other remedies imposed by the federal awarding agency or pass-through entity. Questioned Costs: N/A Recommendation: Management should develop written procurement policies and procedures that incorporate suspension and debarment requirements for federal award transactions. At a minimum, the revised procedures should: • Define covered transactions subject to suspension and debarment verification requirements; • Require SAM Exclusions verification prior to entering into covered transactions with vendors or contractors; • Require documentation retention, such as screenshots, search results, vendor certifications or contract clauses, as applicable; • Assign responsibility for performing and reviewing suspension and debarment verification; • Incorporate the procedures into procurement approvals, grant checklists or contract review workflows; and • Provide periodic training to personnel involved in federal procurement and grant administration. Implementation of these procedures will help ensure that contracts and subawards under covered transactions are not made with parties that are suspended, debarred or otherwise excluded from federal programs. Views of Responsible Officials: Management concurs with this finding and will develop written procurement policies incorporating suspension and debarment procedures for covered transactions under federal awards. The procedures will require documented SAM Exclusions verification prior to approving covered transactions and will identify personnel responsible for performing and reviewing the verification.