Audit 52838

Federal Program Information Funding Agency: U.S. Department of Treasury Federal ALN: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Pass Through Agency: Tennessee Arts Commission Criteria As required by the Uniform Guidance, non-federal entities are prohibited from contracting with parties that are suspended or debarred. The Uniform Guidance also requires the entities to follow documented procurement procedures that are in compliance with the procurement standards in the federal guidelines. Condition During the period under audit, there was no policy in place for procurement procedures, and the policy to determine whether vendors are suspended or debarred was not being followed. Context Per our review of vendors over the applicable threshold, there was no documentation of having been reviewed for procurement, suspension or debarment. During the audit process, management performed procedures on each vendor used for the program and none were suspended or debarred. Cause The Organization had not received federal funding previously and therefore did not have a procurement policy in place until after the award was received from the granting agency. In addition, suspension and debarment procedures were in place, however, there was a change of staff responsibilities and the new staff had not been made aware of their responsibility regarding the procedures for suspension and debarment. Effect Purchases may occur that do not meet the procurement standards, and payments to vendors that had been suspended or debarred could be made and not detected. Auditor's Recommendations The Organization should ensure that the procurement policy subsequently established meets the procurement standards outlined in the Uniform Guidance, and should be followed for all purchases meeting the established thresholds. In addition, the Organization should verify new and existing vendors are not suspended or debarred prior to entering into transactions with vendors. Management Response Procurement: TPAC did not require a Procurement policy in the past; however, in April 2022 when TPAC was notified we would receive the TAC Recovery Grant, a Procurement policy was put in place. Post-audit, we will revisit the policy with senior leadership to ensure compliance. Suspension & Debarment: Once we were made aware that the previous Director of Grants was not verifying suspension & debarment on SAM.gov, a written TPAC Suspension & Debarment Policy was drafted and reviewed with TPAC?s current Vice President of Leadership Giving (Development senior leadership). That VP and TPAC's CFO then verified that all vendors with expenses included in FY 22 TAC Recovery Grant were not suspended or debarred. The Vice President of Leadership Giving will ensure that her staff will comply with the policy moving forward.

Federal Program Information Funding Agency: U.S. Department of Treasury Federal ALN: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Pass Through Agency: Tennessee Arts Commission Criteria As required by the Uniform Guidance, non-federal entities are prohibited from contracting with parties that are suspended or debarred. The Uniform Guidance also requires the entities to follow documented procurement procedures that are in compliance with the procurement standards in the federal guidelines. Condition During the period under audit, there was no policy in place for procurement procedures, and the policy to determine whether vendors are suspended or debarred was not being followed. Context Per our review of vendors over the applicable threshold, there was no documentation of having been reviewed for procurement, suspension or debarment. During the audit process, management performed procedures on each vendor used for the program and none were suspended or debarred. Cause The Organization had not received federal funding previously and therefore did not have a procurement policy in place until after the award was received from the granting agency. In addition, suspension and debarment procedures were in place, however, there was a change of staff responsibilities and the new staff had not been made aware of their responsibility regarding the procedures for suspension and debarment. Effect Purchases may occur that do not meet the procurement standards, and payments to vendors that had been suspended or debarred could be made and not detected. Auditor's Recommendations The Organization should ensure that the procurement policy subsequently established meets the procurement standards outlined in the Uniform Guidance, and should be followed for all purchases meeting the established thresholds. In addition, the Organization should verify new and existing vendors are not suspended or debarred prior to entering into transactions with vendors. Management Response Procurement: TPAC did not require a Procurement policy in the past; however, in April 2022 when TPAC was notified we would receive the TAC Recovery Grant, a Procurement policy was put in place. Post-audit, we will revisit the policy with senior leadership to ensure compliance. Suspension & Debarment: Once we were made aware that the previous Director of Grants was not verifying suspension & debarment on SAM.gov, a written TPAC Suspension & Debarment Policy was drafted and reviewed with TPAC?s current Vice President of Leadership Giving (Development senior leadership). That VP and TPAC's CFO then verified that all vendors with expenses included in FY 22 TAC Recovery Grant were not suspended or debarred. The Vice President of Leadership Giving will ensure that her staff will comply with the policy moving forward.