Finding 2023-003 Inadequate Internal Control over Federal Procurement and Suspension and Debarment Federal award: Assistance Listing No. 21.027, Coronavirus State and Local Fiscal Recovery Funds Auditor Description of Condition and Effect During the audit, we noted that the Organization had not esta...
Finding 2023-003 Inadequate Internal Control over Federal Procurement and Suspension and Debarment Federal award: Assistance Listing No. 21.027, Coronavirus State and Local Fiscal Recovery Funds Auditor Description of Condition and Effect During the audit, we noted that the Organization had not established and implemented sufficient controls over procurements charged to the federal program. The Organization could not provide sufficient documentation demonstrating that: • The rationale for the procurement method and contractor selection was documented; • Potential conflicts of interest were evaluated; • Applicable contractors were verified as not suspended, debarred, or otherwise excluded; • Required federal provisions were included in applicable contracts; and • Contractor performance and compliance with contract terms were appropriately monitored. The absence of appropriately designed and implemented controls creates a reasonable possibility that material noncompliance with federal procurement or suspension and debarment requirements could occur and not be prevented, or detected and corrected, on a timely basis. This could result in unsupported procurement decisions, transactions with excluded or otherwise ineligible contractors, contracts that omit required federal provisions, or inadequate oversight of contractor performance. Auditor Recommendation Management should adopt written federal procurement procedures and implement a standardized review process for procurements charged to federal awards. The process should address and document the procurement method and contractor selection, potential conflicts of interest, contractor eligibility, required federal contract provisions, and oversight of contractor performance. Documentation should be retained with each procurement file and be subject to appropriate management review and approval. Proposed Corrective Action The Organization agrees with the finding. Management will adopt written federal procurement procedures and use a standardized checklist for each procurement charged to a federal award. The checklist will document the procurement method, contractor selection and price basis, evaluation of potential conflicts of interest, contractor eligibility verification, applicable federal contract provisions, and contractor oversight. A designated management reviewer will approve the completed procurement file, and the supporting records will be retained in accordance with the applicable award requirements. Responsible Person: Anticipated Completion Date: June 30, 2027