Audit 413442

Criteria or Specific Requirements: In accordance with 2 CFR Part 180 and 2 CFR 200.214, non-Federal entities are prohibited from entering into covered transactions with parties that are suspended or debarred from participating in Federal programs. Before entering into a covered transaction, entities should verify that the party is not suspended or debarred by checking SAM.gov, collecting a certification from the party, or adding a clause or condition to the covered transaction. Effective internal controls should be designed, implemented and documented to ensure compliance with suspension and debarment requirements, including retaining evidence that verification was performed. Condition: The Organization did not maintain documented evidence that suspension and debarment verification procedures were performed for covered transactions. Per inquiry with the Executive Director, the Organization reviews SAM.gov before entering into covered transactions; however, the Organization does not retain screenshots or other evidence of these reviews. Management also informed HG that, for individuals located outside the United States who do not appear in SAM.gov, the Organization follows alternative procedures in which it contacts staff on the ground to obtain clearance, such as police clearance, before engaging these individuals. These alternative procedures were performed through phone calls and were not documented. Cause: Internal controls over suspension and debarment compliance were not designed to require documentation of verification procedures. Specifically, the Organization did not retain evidence of SAM.gov reviews, and the alternative procedures performed for individuals located outside the United States were conducted informally through phone calls without supporting documentation. Effect: Failure to independently verify and document the suspension and debarment status of vendors increases the risk that the Organization could enter into covered transactions with ineligible entities, resulting in noncompliance with Federal requirements. Questioned Costs: Questioned costs were not identified. Perspective Information: During testing of suspension and debarment compliance, eight vendors were selected for testing, seven located in Iraq and one located in Denmark. The Organization was unable to provide documentation demonstrating that suspension and debarment verification procedures had been performed for the vendors selected. As a result, HG independently verified the suspension and debarment status of all eight vendors through SAM.gov and confirmed that none of the vendors tested were suspended or debarred. No instances of noncompliance were identified. Repeat Finding: None. Recommendations: HG recommends that management document procedures requiring suspension and debarment verification for all covered transactions. Management should retain screenshots or other evidence of SAM.gov reviews performed before entering into covered transactions. For individuals located outside the United States, management should continue to perform SAM.gov searches and retain evidence of those searches, and should also obtain and retain documentation of alternative procedures performed, such as a police clearance certificate. Management should also incorporate supervisory review procedures to ensure verifications are completed and documented in accordance with Federal requirements.