Audit 414146

Criteria: Per 2 CFR 200.303(a), a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the Federal award is managed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per review of 2 CFR 200.213, non-Federal entities are prohibited from contracting with, or making sub-awards under covered transactions to, parties that are suspended or debarred or whose principals are suspended or debarred. Covered transactions include contracts for goods and services awarded under a non-procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., sub-awards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. Condition/context: The Organization did not perform verification procedures to ensure that the vendor was not suspended or debarred. However, we independently verified that the vendor was not suspended or debarred per review of sam.gov. Cause: Prior to this award, the Organization did not receive Federal funds. As a result, the Organization does not have a formal suspension and debarment policy. Effect: If the Organization is not verifying that vendors with individual purchases greater than $25,000 are neither suspended nor debarred, it is possible that the Organization could expend Federal funds with a vendor that is suspended or debarred, in which case the Organization may be required to return the funds expended to that vendor to the Federal oversight agency. Questioned costs: None. Identification as a repeat finding: No. Recommendation: We recommend that the Organization implement a control system when expending Federal funds to perform and maintain documentation that a sam.gov verification was performed for all vendors with individual purchases greater than $25,000. Views of responsible officials and planned corrective actions: Management concurs with the finding. See Exhibit I.