Management Response: Management has reviewed Finding 2025-001 and concurs with the auditor’s observations. Management recognizes that the exceptions resulted from incomplete procurement documentation and inconsistent use of the required Federal contract provisions and procurement file checklists. Co...
Management Response: Management has reviewed Finding 2025-001 and concurs with the auditor’s observations. Management recognizes that the exceptions resulted from incomplete procurement documentation and inconsistent use of the required Federal contract provisions and procurement file checklists. Context and corrective actions: • The omission of the Federal contract provisions required by Appendix II to 2 CFR Part 200 was identified through monitoring performed by the grant administrator on behalf of the pass-through entity. Management initiated remediation during the audit period and has amended the affected contracts to include the applicable provisions. Management will also complete a review of active federally funded contracts by September 30, 2026, to confirm that required provisions are included. • One contract lacked documentation demonstrating that the procurement was conducted in a manner providing full and open competition. The vendor relationship predated the grant award; however, management acknowledges that the existing relationship did not, by itself, demonstrate compliance with the applicable procurement documentation requirements. For future federally funded procurements, including procurements involving existing vendors, management will retain documentation of the procurement method, competition performed, and supporting rationale. • For future procurements, the procurement file must include documented evidence of the required price or cost analysis and suspension and debarment verification before contract award or renewal. These requirements will be incorporated into a standardized Federal procurement checklist, as outlined below, with documented review and approval by the Director of Finance and COO. • Management will provide procurement compliance training to relevant personnel by September 10, 2026 and will perform periodic monitoring of federally funded procurement files. Monitoring results will be reported to Board of Directors, and identified exceptions will be tracked through resolution. • The seven exceptions involved four contracts valued below $50,000, two contracts valued between $50,000 and $100,000, and one contract valued above $100,000. These amounts provide context regarding the potential dollar magnitude of the exceptions but do not change management’s obligation to maintain complete procurement documentation and comply with applicable Federal requirements. • Based on the auditor’s procedures, no questioned costs resulted from this finding, and the costs tested were allowable under the grant and otherwise properly supported. Management nevertheless recognizes the importance of addressing the procurement documentation gaps and believes the corrective actions described above will strengthen compliance, improve oversight, and reduce the risk of recurrence. • Management will Develop and Implement Comprehensive Federal Procurement Compliance Checklist. o The Organization has developed a single, comprehensive Federal Procurement Compliance Checklist to be completed for all covered procurements. This checklist ensures compliance with 2 CFR Part 200 (Uniform Guidance) across all identified deficiency areas. The checklist includes: o Federal Contracts Provisions Section (including all contract provisions required by Appendix II to 2 CFR Part 200) o Full and Open Competition Section (including threshold determination, type of procurement method, evidence of public posting, responses, and evaluation of vendors, or a documented Sole Source procurement approval) o Price/Cost Analysis Section (including analysis method, documentation analysis was performed, and evaluation that proposed cost is reasonable). o Suspension and Debarment Verification Section: documented SAM.gov database search, and documentation of escalation if a vendor is found to be on the exclusion list. o The checklist will be integrated into standard procurement workflows to ensure automatic compliance. o Completed checklist must be signed off by the Director of Finance and COO. All documentation referenced in the checklist (competition records, cost analysis, debarment verification) must be retained with the procurement file. o Organization finalized the comprehensive checklist by August 31, 2026 and provided training to all procurement staff by September 10, 2026. The checklist will be required for all new procurements effective September 1, 2026. For all contracts entered into prior to September 1, 2026 that did not comply with the provisions in Appendix II to 2 CFR Part 200, the organization will complete retroactive documentation to the extent possible and execute amendments to incorporate missing Federal provisions by September 30, 2026. Anticipated Completion Date: August 31, 2026 (checklist development); September 30, 2026 (retroactive compliance and amendments) Responsible Party: Daniel Wilmot, Director of Finance