As it relates to the reliance on the third-party vendor that conducts suspension and debarment -party vendor searches, the third-party vendor provides Sanford a SOC (System and Organizational Controls) 2 Type II report annually over the effectiveness of its controls. This is reviewed by Sanford’s co...
As it relates to the reliance on the third-party vendor that conducts suspension and debarment -party vendor searches, the third-party vendor provides Sanford a SOC (System and Organizational Controls) 2 Type II report annually over the effectiveness of its controls. This is reviewed by Sanford’s compliance department to ensure that there are no findings that would be of concern to Sanford’s reliance on the vendor transaction. Considering the third-party vendor is not relied upon for financial controls, the third-party vendor does not have a SOC 1 (System and Organization Controls) Report and therefore did not provide this level of report to Sanford. Prior to this year’s review, in November 2024, Sanford enhanced their operating procedures and began documenting a monthly validation of the suspension and debarment search results performed by the third-party vendor. These preventative and detective controls and operating procedures provide reasonable assurance over the effectiveness of the controls necessary to prevent the risk of federal funds being paid to the vendors that are suspended or debarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventative and detective internal controls. During the review, there were 5 instances out of 25 samples where suspension and debarment was not performed prior to vendor set up. None of those vendors were associated with the programs funded with federal funds. In addition, there were no instances where the suspension and debarment search was not performed after the enhanced operating procedures were implemented in November. As it relates to the procurement of goods and services, Sanford’s preventative and detective controls and operating procedures provide reasonable assurance over the effectiveness of the controls necessary to prevent the risk of federal funds being utilized for procurement. Sanford believes the risk of any material disbursement subject to procurement is effectively mitigated through existing preventative and detective internal controls. To provide context on the scale of Sole Source procurement, the two transactions for which the requester and the approver of the sole source justification form was the same individual totaled $56,551. The total federal expenditures for the RHC program for the fiscal year ended December 31, 2024, were $1,422,158. Total procurement tested under RHC program was $77,209. Total population subject to procurement was $77,209 which represents 5.42% of the total federal expenditures under the RHC program. Sanford has revised internal procedure to strengthen controls for sole source justification and documentation. Responsible official: Tracy Sattler, Director of Compliance and Melanie Paape, Vice President, Supply Chain Operations; Anticipated completion date: already completed; Responsible Party: Kristi Crawford, Director of Office of Grants; Anticipated completion date: May 1, 2025