Audit 413716

Federal awards: 14.251 Economic Development Initiative, Community Project Funding, and Miscellaneous Grants. Criteria: Organizations receiving federal funding are subject to the government-wide suspension and debarment requirements. Those requirements restrict federal awards, subawards, and contracts with parties that are debarred, suspended, or otherwise excluded from participation in federal programs. Condition: During testing of contracts charged to the Economic Development Initiative, Community Project Funding, and Miscellaneous Grants program, we noted Vermont Huts Association Ltd did not retain evidence that it verified the suspension and debarment status of contractors and vendors before the contract was awarded or a purchase was made. Context: Vermont Huts Association Ltd. retroactively confirmed that contractors and vendors were not debarred, suspended or otherwise excluded from participation in federal programs. Cause: Vermont Huts Association Ltd. did not establish adequate procurement controls to identify covered transaction and document compliance with suspension and debarment requirements before contract award. Effect: The entity could enter into federally funded contracts with parties that are debarred, suspended, or otherwise excluded from federal programs. This exposes the entity to potential unallowable or questioned costs being incurred. Recommendation: We recommend the Organization improve internal controls over procurement to require suspension and debarment verification before entering into each covered transaction. Views of responsible officials: Management agrees with the recommendation. Following the audit, the Organization verified the suspension and debarment status of the vendors selected for testing and confirmed that none were suspended or debarred. The Organization will review and update its existing vendor selection template to align with the applicable requirements of the Uniform Guidance and the Organization’s procurement policy.