Findings Citing § 200.213

Reference Number: 2023-001 Prior Year Finding: Yes Federal Agency: U.S. Department of the Treasury & U.S. Environmental Protection Agency Federal Program: Coronavirus State and Local Fiscal Recovery Funds (American Rescue Plan Act) & Clean Water State Revolving Funds Assistance Listing Number: 21.027 & 66.458 Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: 2 CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person (7) Distribution of work to individuals and firms or economic considerations. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The County could not provide supporting documentation that suspension and debarment status was determined prior to award. Context: The suspension and debarment status for three out of eight vendors was not documented related to the Coronavirus State and Local Fiscal Recovery Funds program. The suspension and debarment status for four out of five vendors was not documented related to the Clean Water State Revolving Funds program. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The County did not establish effective internal controls over suspension and debarment transactions. Effect: The County is not in compliance with federal suspension and debarment regulations. Recommendation: The County should ensure they maintain audit documentation to support their review of suspension and debarment status. Views of responsible officials: The County does check Sam.gov for suspension and debarment transactions. Documentation was retained, but was lost due to a network intrusion. We will remain diligent in documenting our reviews.

Reference Number: 2023-001 Prior Year Finding: Yes Federal Agency: U.S. Department of the Treasury & U.S. Environmental Protection Agency Federal Program: Coronavirus State and Local Fiscal Recovery Funds (American Rescue Plan Act) & Clean Water State Revolving Funds Assistance Listing Number: 21.027 & 66.458 Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: 2 CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person (7) Distribution of work to individuals and firms or economic considerations. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The County could not provide supporting documentation that suspension and debarment status was determined prior to award. Context: The suspension and debarment status for three out of eight vendors was not documented related to the Coronavirus State and Local Fiscal Recovery Funds program. The suspension and debarment status for four out of five vendors was not documented related to the Clean Water State Revolving Funds program. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The County did not establish effective internal controls over suspension and debarment transactions. Effect: The County is not in compliance with federal suspension and debarment regulations. Recommendation: The County should ensure they maintain audit documentation to support their review of suspension and debarment status. Views of responsible officials: The County does check Sam.gov for suspension and debarment transactions. Documentation was retained, but was lost due to a network intrusion. We will remain diligent in documenting our reviews.

Criteria – Under Title 2 U.S. Code of Federal Regulations Part 200.319 “All procurement transaction for the acquisition of property or services required under a Federal awards must be conducted in a manner providing full and open competition consistent with eh standards of this section and 200.320” Also, as required by federal regulations in 2 CFR 200.320 and 2 CFR 200.213 “EPLS (excluded parties list system) review of vendors proposing on a federal project is requested at the time of receipt of proposal through the Federal Awarding Agency Contracting Department.” Condition/Context – For the one new vendor contract entered into during the fiscal year, the County did not follow federal procurement standards. A formal procurement method such as sealed bids, proposals or noncompetitive procurement was not performed and there was no evidence that the County verified the vendor was not suspended or debarred per the federal EPLS prior to entering the contract. We verified that the vendor was not suspended or debarred during the fiscal year 2023. Cause – The individuals overseeing contract procurement applied the normal state level requirements and was not aware the additional federal level requirements applicable due to the grant funds coming from a federal source. Effect – Without following the proper federal policies, the County may be entering into transactions with vendors that have been suspended or debarred. Repeated Finding – This is not a repeated finding. Recommendation – We recommend the County assigns a knowledgeable individual with proper training and skill to complete the procurement process and update policies and procedures for federal awards to ensure that the vendors are checked before entering into a contract. Management’s Response – We concur with the finding. Historically, the procurement process is handled at the department level and departments are expected to understand and comply with the requirements related to the funding source(s) used to procure goods and services. The Health and Human Services department followed our County procurement policy and solicited input from the State, the agency that passes WIC monies to the County, on suggestions for procuring dietitian/nutritionist services. While County policy was followed and input from the State was provided, documentation to support the procurement method used did not illustrate compliance with federal procurement standards and the service provider’s suspension and debarment status was not verified prior to entering into a contract. To mitigate this issue in the future, County Counsel reminded departments of the importance of understanding the requirements tied to the source being used to procure goods and services and to notify Counsel when federal monies are being used. Furthermore, County Counsel will include the suspension and debarment clause in the County’s standard contract templates, and the County Purchasing Policy (4-03) will be updated to reflect the importance of complying with requirements tied to a specific funding source. Lastly, County Counsel and Internal Audit will develop and provide training to departments.

Federal Program Information: Funding Agency: U.S. Department of Agriculture Title: USDA School Breakfast Program and National School Lunch Program FAL Number: 10.553 and 10.555 Passthrough: New Mexico Public Education Department Award Year: 2023 Criteria: §200.213 Suspension and debarment. Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, sub awards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. §200.317 Procurements by states. When procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. The state will comply with §200.322 Procurement of recovered materials and ensure that every purchase order or other contract includes any clauses required by section §200.326 Contract provisions. All other non-Federal entities, including sub recipients of a state, will follow §§200.318 General procurement standards through 200.326 Contract provisions. §200.318 General procurement standards. (a) The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. (b) Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. APPENDIX II TO PART 200—CONTRACT PROVISIONS FOR NON-FEDERAL ENTITY CONTRACTS UNDER FEDERAL AWARDS In addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. (H) Debarment and Suspension (Executive Orders 12549 and 12689)—A contract award (see 2 CFR 180.220) must not be made to parties listed on the government-wide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp., p. 189) and 12689 (3 CFR part 1989 Comp., p. 235), “Debarment and Suspension.” https://www.sam.gov/portal/public/SAM/ SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549. Condition: During our testing of single audit disbursements, we identified a vendor which would meet the requirement of verifying that the vendor was not suspended or debarred or otherwise excluded from receiving the contract which was funded through Federal dollars. The vendor received more than $25,000 in payments from the District from Federal grant sources. The vendor is not currently suspended or debarred from receiving Federal contracts; however, the District did not have proper internal controls in place to verify this prior to the purchase. The District did make improvement in this area for all new work during the year. However, these projects were completed in the year under audit before the District became aware of the requirements above and could not retroactively cure the errors. Cause: District personnel did not verify that vendors which meet the $25,000 thresholds are not suspended, debarred, or otherwise excluded from participating in contracts funded through Federal awards due to a misunderstanding of staff personnel regarding this requirement. Effect: The District is not in compliance with Federal regulations related to the grant and could put funding in jeopardy or require the District to reimburse the program for improper grant distributions. Auditor’s Recommendation: We recommend the District establish a policy and implement procedures regarding large purchases related to Federal grants to insure that no vendors who are suspended, debarred, or otherwise excluded from participating in transactions funded through Federal grants are used. As identified above, there are several methods in which the District can verify vendors are not suspended or debarred. The District may have the vendor provide an annual certification that it is not currently suspended, debarred, or otherwise prevented from receiving Federal dollars. In other occasions in which a single purchase is going to be made, the purchasing procedures should include looking up the vendor on the GSA website, printing a copy of the verification, and placing it in the file with the purchase order. The District has options, and it should establish what method is the least intrusive but also effective in complying with the requirements of the Uniform Grant Guidance. Responsible Official’s Plan:  Specific corrective action plan for finding: The Grants Finance Department, Federal Grants Department, Operations Department along with the Purchasing Department will review Vendors that are issued requisitions at each approval level to assist in catching $25K or more for Suspension and Debarment. A printed document from SAM.GOV verifying eligibility for Requisitions over $25K will be attached. Infinite Visions is set up to alert originators entering requisitions over $25,000 to contact Purchasing or Grants Department to check the vendor in SAM.GOV to confirm the vendor is vetted to comply with federal regulations. At the initial setup of new vendors, the Purchasing Department will review vendors in SAM.GOV. A printed document from SAM.GOV verifying eligibility of vendor will be attached to the vendor file.  Timeline for completion of corrective action plan: The process was implemented immediately upon awareness of the finding and we are hopeful that all issues have been resolved by FY24.  Employee position(s) responsible for meeting the timeline: Grants Specialists, CPO, Finance Specialists, Purchasing Specialist, Federal Grants Coordinator, Federal Grants Specialist

Federal Program Information: Funding Agency: U.S. Department of Interior Title: Rangeland Resource Management FAL Number: 15.237 Passthrough: L20AC00454-1-L21AC10556 (2) Award Year: 2023 Criteria: §200.213 Suspension and debarment. Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, sub awards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. §200.317 Procurements by states. When procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. The state will comply with §200.322 Procurement of recovered materials and ensure that every purchase order or other contract includes any clauses required by section §200.326 Contract provisions. All other non-Federal entities, including sub recipients of a state, will follow §§200.318 General procurement standards through 200.326 Contract provisions. §200.318 General procurement standards. (a) The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. (b) Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. APPENDIX II TO PART 200—CONTRACT PROVISIONS FOR NON-FEDERAL ENTITY CONTRACTS UNDER FEDERAL AWARDS In addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. (H) Debarment and Suspension (Executive Orders 12549 and 12689)—A contract award (see 2 CFR 180.220) must not be made to parties listed on the government-wide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp., p. 189) and 12689 (3 CFR part 1989 Comp., p. 235), “Debarment and Suspension.” https://www.sam.gov/portal/public/SAM/ SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549. Questioned Costs: None Condition: During our testing of single audit disbursements, we identified two vendors which would meet the requirement of verifying that the vendor was not suspended or debarred or otherwise excluded from receiving the contract, which was funded through Federal dollars. The vendors received more than $25,000 in payments from the District from Federal grant sources. The vendors are not currently suspended or debarred from receiving Federal contracts; however, the District did not have proper internal controls in place to verify this prior to the payment. Cause: District personnel were unaware of the requirement to ensure vendors receiving more than $25,000 were not on the suspension and debarment listing. Effect: The District is not in compliance with Federal regulations related to the grant and could put funding in jeopardy or require the District to reimburse the program for improper grant distributions. Auditor’s Recommendation: We recommend the District establish a policy and implement procedures regarding large purchases related to Federal grants to insure that no vendors who are suspended, debarred, or otherwise excluded from participating in transactions funded through Federal grants are used. As identified above, there are several methods in which the District can verify vendors are not suspended or debarred. The District may have the vendor provide an annual certification that it is not currently suspended, debarred, or otherwise prevented from receiving Federal dollars. In other occasions in which a single purchase is going to be made, the purchasing procedures should include looking up the vendor on the GSA website, printing a copy of the verification, and placing it in the file with the purchase order. The District has options, and it should establish what method is the least intrusive, but also effective, in complying with the requirements of the Uniform Grant Guidance. Responsible Official’s Plan:  Specific corrective action plan for finding: The procurement Officer of SJSWCD has updated the procurement process on 12/7/2023 that all contractors who will be receiving Federal monies must provide an annual certification that they are not suspended, debarred, inactive, or otherwise excluded from participating in transactions funded through Federal grants. The policy change will be approved at the next board meeting.  Timeline for completion of corrective action plan: December 7, 2023  Employee position(s) responsible for meeting the timeline: District Manager/Procurement Officer

Finding: 2023-002 Non-Compliance with Suspension and Debarment Information on the Federal Program: Assistance Listing Number 16.582 Criteria: Under 2 CFR §200.213, Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non-Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Condition: The Association did not consistently perform screenings on its potential or current vendors, suppliers, or contractors that were paid with Federal funds. Cause: The Association does not have a formal policy with respect to screening vendors, suppliers, or contractors in order to adhere to compliance over suspension and debarment. Effect: Failure to screen potential and current vendors, suppliers, contractors, subrecipients, etc. increases the potential that Federal funds be inadvertently provided to parties deemed to be suspended or disbarred by the United States Government. Questioned Costs: None noted. Context: Our audit procedures consisted of testwork completed on individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Association's accounting system. We consider our sample to be representative of the population. The condition appeared to be systemic in nature. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend management develop and implement a formal policy on suspension and debarment. This policy should include a threshold, generally $25,000, for when vendors, suppliers, contractors and sub-contractors/grantees should be screened. All screenings should be conducted prior to signing a contract or issuing payment. We recommend that the Association notify all employees of this policy and ensure that it is enforced during the upcoming fiscal year.

Finding: 2023-002 Non-Compliance with Suspension and Debarment Information on the Federal Program: Assistance Listing Number 16.582 Criteria: Under 2 CFR §200.213, Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non-Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Condition: The Association did not consistently perform screenings on its potential or current vendors, suppliers, or contractors that were paid with Federal funds. Cause: The Association does not have a formal policy with respect to screening vendors, suppliers, or contractors in order to adhere to compliance over suspension and debarment. Effect: Failure to screen potential and current vendors, suppliers, contractors, subrecipients, etc. increases the potential that Federal funds be inadvertently provided to parties deemed to be suspended or disbarred by the United States Government. Questioned Costs: None noted. Context: Our audit procedures consisted of testwork completed on individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Association's accounting system. We consider our sample to be representative of the population. The condition appeared to be systemic in nature. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend management develop and implement a formal policy on suspension and debarment. This policy should include a threshold, generally $25,000, for when vendors, suppliers, contractors and sub-contractors/grantees should be screened. All screenings should be conducted prior to signing a contract or issuing payment. We recommend that the Association notify all employees of this policy and ensure that it is enforced during the upcoming fiscal year.

Finding 2023-003: Non-Compliance with Suspension and Debarment Information on the Federal Program: 93.368 Criteria: 2 CFR §200.213 non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non-Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Condition: We noted that while the Foundation does conduct screenings on all vendors, suppliers and consultants, the date that the screening is conducted is not documented. As such, we are unable to determine if the screening was conducted prior to payment or signing of the contract. Cause: The Foundation does not require that the date the screening is conducted be documented. Effect: Failure to screen potential and current vendors, suppliers or contractors prior to payment or contract signing increases the potential that Federal funds be inadvertently provided to parties deemed to be suspended or disbarred by the United States Government. Questioned Costs: None noted. Context: Our audit procedures consisted of testwork completed on individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Foundation's general ledger (accounting system). We consider our sample to be representative of the population. The condition appeared to be systematic in nature. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Foundation revise their policy regarding suspension and debarment to require that all screenings are accompanied by the documented date in which they were conducted.

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1026 -2021 Pass-Through Agency: Virginia Department of Education Pass-Through Number(s): 179001-600540/452770 Award Period: 3/3/21 – 12/31/24 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: 2 CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person (7) Distribution of work to individuals and firms or economic considerations. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Spotsylvania Schools could not provide supporting documentation that suspension and debarment status was determined prior to award. Context: The suspension and debarment status for one out of two vendors was not retained related to the Coronavirus and Local Fiscal Recovery Funds Program. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: Spotsylvania Schools did not adhere to established internal controls over suspension and debarment transactions. Effect: In the absence of required documentation, it is not possible to verify that particular vendors were not suspended or debarred at the time that the applicable agreement or contract was finalized. Repeat Finding: No Recommendation: Spotsylvania School should ensure that employees are following the requirements they have outlined in their procurement policy. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1026 -2021 Pass-Through Agency: Virginia Department of Education Pass-Through Number(s): 179001-600540/452770 Award Period: 3/3/21 – 12/31/24 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: 2 CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person (7) Distribution of work to individuals and firms or economic considerations. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Spotsylvania Schools could not provide supporting documentation that suspension and debarment status was determined prior to award. Context: The suspension and debarment status for one out of two vendors was not retained related to the Coronavirus and Local Fiscal Recovery Funds Program. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: Spotsylvania Schools did not adhere to established internal controls over suspension and debarment transactions. Effect: In the absence of required documentation, it is not possible to verify that particular vendors were not suspended or debarred at the time that the applicable agreement or contract was finalized. Repeat Finding: No Recommendation: Spotsylvania School should ensure that employees are following the requirements they have outlined in their procurement policy. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1026 -2021 Pass-Through Agency: Virginia Department of Education Pass-Through Number(s): 179001-600540/452770 Award Period: 3/3/21 – 12/31/24 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: 2 CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person (7) Distribution of work to individuals and firms or economic considerations. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Spotsylvania Schools could not provide supporting documentation that suspension and debarment status was determined prior to award. Context: The suspension and debarment status for one out of two vendors was not retained related to the Coronavirus and Local Fiscal Recovery Funds Program. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: Spotsylvania Schools did not adhere to established internal controls over suspension and debarment transactions. Effect: In the absence of required documentation, it is not possible to verify that particular vendors were not suspended or debarred at the time that the applicable agreement or contract was finalized. Repeat Finding: No Recommendation: Spotsylvania School should ensure that employees are following the requirements they have outlined in their procurement policy. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1026 -2021 Pass-Through Agency: Virginia Department of Education Pass-Through Number(s): 179001-600540/452770 Award Period: 3/3/21 – 12/31/24 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: 2 CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person (7) Distribution of work to individuals and firms or economic considerations. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Spotsylvania Schools could not provide supporting documentation that suspension and debarment status was determined prior to award. Context: The suspension and debarment status for one out of two vendors was not retained related to the Coronavirus and Local Fiscal Recovery Funds Program. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: Spotsylvania Schools did not adhere to established internal controls over suspension and debarment transactions. Effect: In the absence of required documentation, it is not possible to verify that particular vendors were not suspended or debarred at the time that the applicable agreement or contract was finalized. Repeat Finding: No Recommendation: Spotsylvania School should ensure that employees are following the requirements they have outlined in their procurement policy. Views of responsible officials: There is no disagreement with the audit finding.

III ‐ Findings and Questioned Costs – Major Federal Award Program Finding No. 2023‐002 National Science Foundation ‐ Research and Development Cluster Federal Assistance Listing Number #47.070 ‐ Compliance Requirement Code: I‐Procurement and Suspension and Debarment Criteria In accordance with §200.318(a), General Procurement Standards, a non‐federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, §200.318(i) states that the non‐federal entity must maintain records sufficient to detail the history of the procurement. In addition, in accordance with §200.213 and §180.300, non‐federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition For the procurement samples tested, Management did not provide adequate supporting documentation for the procurement including ensuring proper suspension and debarment checks were performed. Cause The Organization did not have adequate policies, procedures, and controls in place to ensure compliance with the general procurement standards and suspension and debarment requirements. Effect or Potential Effect Failure to perform procurement procedures in accordance with a written policy that complies with the Uniform Guidance could result in the procurement being disallowed. Failure to timely verify that a vendor is not suspended or debarred could result in entering into a contract with an entity that is barred from performing work for the U.S. government. Questioned Costs: Not applicable. Context For three procurement samples out of a total of three tested, management did not provide adequate supporting documentation for the procurement transaction. Repeat Finding: No Recommendation We recommend that the Organization establish written procurement policies and procedures to ensure that Organization is in compliance with the Uniform Guidance and that all staff are trained on this policy to ensure compliance and related internal controls over compliance are operating effectively. Views of Responsible Officials Our understanding of the finding is that it pertains to the following sections of 2 CFR 180: § 180.220 Are any procurement contracts included as covered transactions? (a) Covered transactions under this part— (1) Do not include any procurement contracts awarded directly by a Federal agency; but (2) Do include some procurement contracts awarded by non Federal participants in nonprocurement covered transactions. (b) Specifically, a contract for goods or services is a covered transaction if any of the following applies: (1) The contract is awarded by a participant in a nonprocurement transaction that is covered under §180.210, and the amount of the contract is expected to equal or exceed $25,000. (2) The contract requires the consent of an official of a Federal agency. In that case, the contract, regardless of the amount, always is a covered transaction, and it does not matter who awarded it. For example, it could be a subcontract awarded by a contractor at a tier below a nonprocurement transaction, as shown in the appendix to this part. § 180.300 What must I do before I enter into a covered transaction with another person at the next lower tier? When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. To support compliance with these requirements, MGHPCC controls for federal programs in place in FY23 included the following provision: Criteria for approval of Purchase Orders above $25,000 include a check to ensure that the vendors are not suspended disbarred, or otherwise excluded from participating in a covered transaction as defined in 2CFR 180.220 and 2CFR 180.300. To address the finding noted above, we have added the following documentation requirement: Policy has been updated to require that the check be documented by capturing a copy of the entity information database entry at www.sam.gov as part of the Purchase Order approval process for vendorswho exceed the threshold defined in 2CFR 180.220 and 2CFR 180.300. The entity information database report includes a time stamp, which serves as an indication of when the database entry was checked.

2023-006 - Internal Control Over Compliance and Compliance – Procurement, Suspension and Debarment Program- U.S. Department of Energy, National Forum for State and Territorial Chief Executives - HHS OA, Yr 10 and Yr 11, National Forum ALN: 93.528, Award #: 2U98OA09028, Award Year: 09/01/2022 – 09/29/2023 Criteria - In accordance with 2 CFR §200.318(a), General Procurement Standards, the non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, §200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In accordance with §200.213 and §180.300, Suspension and Debarment, non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity, or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a non-federal entity. In addition, in accordance with §180.415(b), non-federal entities cannot renew or extend covered transactions (other than no-cost time extension) with any excluded person, or under which an excluded person is a principal, unless the non-federal entity obtains an exception under §180.135. Condition – During our testing of the procurement, suspension and debarment compliance requirements, we identified one procurement sample out of a total of two procurement samples tested wherein management was unable to provide evidence that the suspension and debarment check was performed prior to entering into contract with the vendor. Management has subsequently determined that the vendor was not suspended or debarred. Questioned Costs – None. Context – This is a condition identified per review of NGA Center’s compliance with specified requirements using a statistically valid sample. Cause – NGA Center’s personnel did not adhere to NGA Center’s documented policies and procedures for ensuring proper suspension and debarment validations were performed prior to entering a covered transaction. Effect – Failure to timely verify that a vendor is not suspended or debarred could result in transactions involving unreasonable costs or result in unintentionally entering a contract with an entity that is barred from performing work for the Federal government. Repeat Finding – This is not a repeat finding. Recommendation - We recommend management ensure that suspension and debarment regulations are followed. We also recommend management ensure all required procurement documentation is maintained in conjunction with its document retention policy. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.

Federal agency: U.S. Department of Education Federal program title: Special Education Cluster Assistance Listing Number: 84.027, 84.173 Pass-Through Agency: Massachusetts Department of Elementary and Secondary Education and Massachusetts Department of Early Education and Care Pass-Through Number(s): Various (see Schedule of Expenditures of Federal Awards) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: • Material Weakness in Internal Control over Compliance Compliance Requirement: Suspension and Debarment Criteria or Specific Requirement: The Code of Federal Regulations (CFR) Title 2 Part 200.213 states that nonfederal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition and Context: For two of three vendors in our statistically valid sample, documentation was not provided to support that the City verified the vendors were not debarred or suspended from participation in Federal assistance programs or activities. Questioned Costs: None Cause: Procedures were not in place to document the verification that all vendors were not suspended or debarred from participation in Federal assistance programs or activities. Effect: While this did not occur in the instance identified in this finding, lack of verification of vendors’ debarment or suspension status could cause federal grant funds to be expended with vendors that are excluded from participation in Federal assistance programs or activities. Repeat Finding: Yes (Finding 2022-001) Recommendation: We recommend procedures be implemented to document the verification that all vendors are not suspended or debarred from participation in Federal assistance programs or activities. Views of Responsible Officials: Management agrees with the finding.

Federal agency: U.S. Department of Education Federal program title: Special Education Cluster Assistance Listing Number: 84.027, 84.173 Pass-Through Agency: Massachusetts Department of Elementary and Secondary Education and Massachusetts Department of Early Education and Care Pass-Through Number(s): Various (see Schedule of Expenditures of Federal Awards) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: • Material Weakness in Internal Control over Compliance Compliance Requirement: Suspension and Debarment Criteria or Specific Requirement: The Code of Federal Regulations (CFR) Title 2 Part 200.213 states that nonfederal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition and Context: For two of three vendors in our statistically valid sample, documentation was not provided to support that the City verified the vendors were not debarred or suspended from participation in Federal assistance programs or activities. Questioned Costs: None Cause: Procedures were not in place to document the verification that all vendors were not suspended or debarred from participation in Federal assistance programs or activities. Effect: While this did not occur in the instance identified in this finding, lack of verification of vendors’ debarment or suspension status could cause federal grant funds to be expended with vendors that are excluded from participation in Federal assistance programs or activities. Repeat Finding: Yes (Finding 2022-001) Recommendation: We recommend procedures be implemented to document the verification that all vendors are not suspended or debarred from participation in Federal assistance programs or activities. Views of Responsible Officials: Management agrees with the finding.

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1026 -2021 Pass-Through Agency: Virginia Department of Education Pass-Through Number(s): 179001-600540/452770 Award Period: 3/3/21 – 12/31/24 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: 2 CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person (7) Distribution of work to individuals and firms or economic considerations. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Spotsylvania Schools could not provide supporting documentation that suspension and debarment status was determined prior to award. Context: The suspension and debarment status for one out of two vendors was not retained related to the Coronavirus and Local Fiscal Recovery Funds Program. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: Spotsylvania Schools did not adhere to established internal controls over suspension and debarment transactions. Effect: In the absence of required documentation, it is not possible to verify that particular vendors were not suspended or debarred at the time that the applicable agreement or contract was finalized. Repeat Finding: No Recommendation: Spotsylvania School should ensure that employees are following the requirements they have outlined in their procurement policy. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1026 -2021 Pass-Through Agency: Virginia Department of Education Pass-Through Number(s): 179001-600540/452770 Award Period: 3/3/21 – 12/31/24 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: 2 CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person (7) Distribution of work to individuals and firms or economic considerations. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Spotsylvania Schools could not provide supporting documentation that suspension and debarment status was determined prior to award. Context: The suspension and debarment status for one out of two vendors was not retained related to the Coronavirus and Local Fiscal Recovery Funds Program. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: Spotsylvania Schools did not adhere to established internal controls over suspension and debarment transactions. Effect: In the absence of required documentation, it is not possible to verify that particular vendors were not suspended or debarred at the time that the applicable agreement or contract was finalized. Repeat Finding: No Recommendation: Spotsylvania School should ensure that employees are following the requirements they have outlined in their procurement policy. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1026 -2021 Pass-Through Agency: Virginia Department of Education Pass-Through Number(s): 179001-600540/452770 Award Period: 3/3/21 – 12/31/24 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: 2 CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person (7) Distribution of work to individuals and firms or economic considerations. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Spotsylvania Schools could not provide supporting documentation that suspension and debarment status was determined prior to award. Context: The suspension and debarment status for one out of two vendors was not retained related to the Coronavirus and Local Fiscal Recovery Funds Program. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: Spotsylvania Schools did not adhere to established internal controls over suspension and debarment transactions. Effect: In the absence of required documentation, it is not possible to verify that particular vendors were not suspended or debarred at the time that the applicable agreement or contract was finalized. Repeat Finding: No Recommendation: Spotsylvania School should ensure that employees are following the requirements they have outlined in their procurement policy. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1026 -2021 Pass-Through Agency: Virginia Department of Education Pass-Through Number(s): 179001-600540/452770 Award Period: 3/3/21 – 12/31/24 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: 2 CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person (7) Distribution of work to individuals and firms or economic considerations. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Spotsylvania Schools could not provide supporting documentation that suspension and debarment status was determined prior to award. Context: The suspension and debarment status for one out of two vendors was not retained related to the Coronavirus and Local Fiscal Recovery Funds Program. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: Spotsylvania Schools did not adhere to established internal controls over suspension and debarment transactions. Effect: In the absence of required documentation, it is not possible to verify that particular vendors were not suspended or debarred at the time that the applicable agreement or contract was finalized. Repeat Finding: No Recommendation: Spotsylvania School should ensure that employees are following the requirements they have outlined in their procurement policy. Views of responsible officials: There is no disagreement with the audit finding.

Finding No. 2023-004 Suspension and Debarment Federal Agency: U.S. Department of Education; U.S. Department of the Treasury Federal Program Name: Special Education Cluster (IDEA); Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 84.027/84.173; 21.027 Federal Award Identification Number and Year: H027A220054 – 2023; SLFRP4547 – 2021 Pass-Through Agency: RI Department of Elementary and Secondary Education, RI Department of Revenue Pass-Through Number(s): 2725-13202-301; 12060-OPM20600-29669 Award Period: 7/1/22-6/30/23; 3/3/21-12/31/24 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: 2 CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Condition The Town and Coventry Public Schools do not have policies and procedures in place to ensure that they do not contract with or make subawards to parties that are suspended or debarred. Questioned Costs None Context Although the Town and Coventry Public Schools do not have policies or procedures in place to ensure that they do not contract with or make subawards to parties that are suspended or debarred, we did not identify instances where Federal grant awards were paid to suspended or debarred vendors for 8 of 8 suspension and debarment transactions selected for testing. Cause Management was not aware of the requirements of 2 CFR section 180 within Uniform Guidance. Effect The Town and Coventry Public Schools are at risk for noncompliance with federal grants as it relates to suspension and debarment. Repeat Finding Yes, repeat of prior year finding 2022-008. Recommendation We recommend that the Town and Coventry Public Schools implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods or services. Views of Responsible Officials Management agrees with this finding.

Finding No. 2023-004 Suspension and Debarment Federal Agency: U.S. Department of Education; U.S. Department of the Treasury Federal Program Name: Special Education Cluster (IDEA); Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 84.027/84.173; 21.027 Federal Award Identification Number and Year: H027A220054 – 2023; SLFRP4547 – 2021 Pass-Through Agency: RI Department of Elementary and Secondary Education, RI Department of Revenue Pass-Through Number(s): 2725-13202-301; 12060-OPM20600-29669 Award Period: 7/1/22-6/30/23; 3/3/21-12/31/24 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: 2 CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Condition The Town and Coventry Public Schools do not have policies and procedures in place to ensure that they do not contract with or make subawards to parties that are suspended or debarred. Questioned Costs None Context Although the Town and Coventry Public Schools do not have policies or procedures in place to ensure that they do not contract with or make subawards to parties that are suspended or debarred, we did not identify instances where Federal grant awards were paid to suspended or debarred vendors for 8 of 8 suspension and debarment transactions selected for testing. Cause Management was not aware of the requirements of 2 CFR section 180 within Uniform Guidance. Effect The Town and Coventry Public Schools are at risk for noncompliance with federal grants as it relates to suspension and debarment. Repeat Finding Yes, repeat of prior year finding 2022-008. Recommendation We recommend that the Town and Coventry Public Schools implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods or services. Views of Responsible Officials Management agrees with this finding.

Finding No. 2023-004 Suspension and Debarment Federal Agency: U.S. Department of Education; U.S. Department of the Treasury Federal Program Name: Special Education Cluster (IDEA); Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 84.027/84.173; 21.027 Federal Award Identification Number and Year: H027A220054 – 2023; SLFRP4547 – 2021 Pass-Through Agency: RI Department of Elementary and Secondary Education, RI Department of Revenue Pass-Through Number(s): 2725-13202-301; 12060-OPM20600-29669 Award Period: 7/1/22-6/30/23; 3/3/21-12/31/24 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: 2 CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Condition The Town and Coventry Public Schools do not have policies and procedures in place to ensure that they do not contract with or make subawards to parties that are suspended or debarred. Questioned Costs None Context Although the Town and Coventry Public Schools do not have policies or procedures in place to ensure that they do not contract with or make subawards to parties that are suspended or debarred, we did not identify instances where Federal grant awards were paid to suspended or debarred vendors for 8 of 8 suspension and debarment transactions selected for testing. Cause Management was not aware of the requirements of 2 CFR section 180 within Uniform Guidance. Effect The Town and Coventry Public Schools are at risk for noncompliance with federal grants as it relates to suspension and debarment. Repeat Finding Yes, repeat of prior year finding 2022-008. Recommendation We recommend that the Town and Coventry Public Schools implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods or services. Views of Responsible Officials Management agrees with this finding.

2023-003 – Procurement and Suspension and Debarment Federal Agency: U.S. Department of Education Federal Program: Arts in Education Federal Assistance Listing Number: 84.351 Pass-through Entity: Not applicable. Award Identification Number: S351A210115 and U351D180067 Year: 2022 and 2023 Criteria: 2 CFR §180.300 and 2 CFR §200.213 require non-federal entities to verify that contractors and subrecipients are not suspended or debarred from participation in federal programs. This verification must be accomplished by checking the System for Award Management (SAM), collecting a certification from the contractor, or adding a clause or condition to the covered transaction. Condition: During our testing, we noted the Organization did not maintain documentation to support that internal controls were performed to ensure vendors were not suspended or debarred prior to entering into the contract. Context: During our testing of 2 out of 3 vendors whose transactions exceeded the covered transaction threshold, we noted that while the Organization did not contract with any suspended or debarred vendors, there was no documentation of internal controls or procedures in place to verify vendor suspension or debarment status prior to entering into the covered transactions. Cause: The Organization was unable to locate documentation to support the performance of procedures to ensure vendors were not suspended or debarred. Effect: Without documented internal controls, there is an increased risk that the Organization could inadvertently enter into covered transactions with suspended or debarred vendors, resulting in noncompliance with federal requirements. Questioned Costs: None Repeat Finding: No Recommendation: We recommend the Organization establish and document internal controls and procedures to verify and retain evidence that vendors are not suspended or debarred prior to entering into covered transactions, in accordance with federal requirements. Views of Responsible Officials: See Corrective Action Plan.

Criteria: Internal Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Per 2 CFR 200.213, Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The County did not have an internal control process and did not maintain documentation of a vendor’s suspension and debarment status. Cause: The County had not developed internal control policies and procedures to prevent entering into a contract with an organization that was debarred or suspended. The County’s Procurement office indicated they were unaware of the suspension and debarment verification requirement for all federally funded procurements and subawards $25,000 or more. Questioned Costs: None noted. Effect: Federal funds may be paid to parties that are ineligible to participate in a federal program. Recommendation: We recommend the County evaluate its policies procedures to ensure that suspension and debarment requirements are being met prior to entering into transactions with vendors. Identification of Repeat Finding: This is a repeat finding. Views of Responsible Officials: Management agrees with the finding.

Finding 2022-007: Suspension and Debarment Criteria: Under 2 CFR §200.213, Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non-Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Condition: During our testing over Suspension and Debarment, we determined that SAMU did not perform screenings on potential or current vendors, suppliers, contractors or employees that were paid with Federal funds. Cause: SAMU does not have a formal internal policy with respect to screening vendors, suppliers, contractors and employees in order to adhere to compliance over suspension and debarment. Effect or Potential Effect: Failure to screen potential and current vendors, suppliers, contractors and employees increases the potential that Federal funds be inadvertently provided to parties deemed to be suspended or disbarred by the United States Government. Questioned Costs: None. Context: We noted that vendors, suppliers, contractors and employees selected for testing did not have a formally documented Suspension and Debarment check conducted prior to engagement. Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend that management develop and implement a formal policy on suspension and debarment. This policy should include a threshold for when vendors, suppliers, contractors and employees should be screened. All screenings should be conducted prior to signing a contract or issuing payment. We recommend that SAMU notify all employees of this policy and ensure that it is enforced during the upcoming fiscal year.

Finding 2022-004: Suspension and Debarment Criteria: Under 2 CFR §200.213, Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non-Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Condition: During our testing over Suspension and Debarment, we determined that USTTI did not perform screenings on potential or current vendors, suppliers or contractors that were paid with Federal funds. Cause: USTTI does not have a formal internal policy with respect to screening vendors, suppliers, contractors and employees in order to adhere to compliance over suspension and debarment. Effect: Failure to screen potential and current vendors, suppliers, contractors and employees increases the potential that Federal funds be inadvertently provided to parties deemed to be suspended or disbarred by the United States Government. Questioned Costs: None. Context: We noted that vendors, suppliers etc. selected for testing did not have a formally documented Suspension and Debarment check conducted prior to engagement. Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend that management develop and implement a formal policy on suspension and debarment. This policy should include a threshold for when vendors, suppliers, contractors and employees should be screened. All screenings should be conducted prior to signing a contract or issuing payment. We recommend that USTTI notify all employees of this policy and ensure that it is enforced during the upcoming fiscal year.

Finding 2022-004: Suspension and Debarment Criteria: Under 2 CFR §200.213, Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non-Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Condition: During our testing over Suspension and Debarment, we determined that USTTI did not perform screenings on potential or current vendors, suppliers or contractors that were paid with Federal funds. Cause: USTTI does not have a formal internal policy with respect to screening vendors, suppliers, contractors and employees in order to adhere to compliance over suspension and debarment. Effect: Failure to screen potential and current vendors, suppliers, contractors and employees increases the potential that Federal funds be inadvertently provided to parties deemed to be suspended or disbarred by the United States Government. Questioned Costs: None. Context: We noted that vendors, suppliers etc. selected for testing did not have a formally documented Suspension and Debarment check conducted prior to engagement. Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend that management develop and implement a formal policy on suspension and debarment. This policy should include a threshold for when vendors, suppliers, contractors and employees should be screened. All screenings should be conducted prior to signing a contract or issuing payment. We recommend that USTTI notify all employees of this policy and ensure that it is enforced during the upcoming fiscal year.

Finding 2022-004: Suspension and Debarment Criteria: Under 2 CFR §200.213, Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non-Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Condition: During our testing over Suspension and Debarment, we determined that USTTI did not perform screenings on potential or current vendors, suppliers or contractors that were paid with Federal funds. Cause: USTTI does not have a formal internal policy with respect to screening vendors, suppliers, contractors and employees in order to adhere to compliance over suspension and debarment. Effect: Failure to screen potential and current vendors, suppliers, contractors and employees increases the potential that Federal funds be inadvertently provided to parties deemed to be suspended or disbarred by the United States Government. Questioned Costs: None. Context: We noted that vendors, suppliers etc. selected for testing did not have a formally documented Suspension and Debarment check conducted prior to engagement. Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend that management develop and implement a formal policy on suspension and debarment. This policy should include a threshold for when vendors, suppliers, contractors and employees should be screened. All screenings should be conducted prior to signing a contract or issuing payment. We recommend that USTTI notify all employees of this policy and ensure that it is enforced during the upcoming fiscal year.

Information on the Federal Programs: All Programs Criteria: CFR 200.213 states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non-Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; (b) collecting a certification from that person; (c) adding a clause or condition to the covered transaction with that person. Additionally, as outlined in each Department of State award, recipients of U.S. Government funds must adhere to the United States Government’s requirements on screening all potential vendors, suppliers, subcontractors/grantees and employees against the United States Department of State’s Terrorism watch list. The screening of all potential vendors, suppliers, sub-contractors/grantees and employees must be documented in writing. Condition: The Organization did not provide timely/contemporaneous documentation to support its screenings for its potential and current vendors, suppliers, contractors, employees, etc. that were paid with Federal funds during the year under audit. Cause: The Organization did not follow its internal policy with respect to screening vendors, suppliers, contractors and employees in order to adhere to compliance over suspension and debarment. Context: Our audit procedures consisted of testwork completed on individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organization's general ledger (accounting system). We consider our sample to be representative of the population. The condition appeared to be systemic in nature. Effect: The Organization could make payments to an entity or individual that has been debarred or suspended by the US Government; such costs would be disallowed, and the Organization could face consequences for lack of compliance. Questioned Costs: None noted. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organization adhere to its policy of how screenings will be performed and how contemporaneous documentation will be maintained in order to demonstrate compliance with government regulations.

Information on the Federal Programs: All Programs Criteria: CFR 200.213 states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non-Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; (b) collecting a certification from that person; (c) adding a clause or condition to the covered transaction with that person. Additionally, as outlined in each Department of State award, recipients of U.S. Government funds must adhere to the United States Government’s requirements on screening all potential vendors, suppliers, subcontractors/grantees and employees against the United States Department of State’s Terrorism watch list. The screening of all potential vendors, suppliers, sub-contractors/grantees and employees must be documented in writing. Condition: The Organization did not provide timely/contemporaneous documentation to support its screenings for its potential and current vendors, suppliers, contractors, employees, etc. that were paid with Federal funds during the year under audit. Cause: The Organization did not follow its internal policy with respect to screening vendors, suppliers, contractors and employees in order to adhere to compliance over suspension and debarment. Context: Our audit procedures consisted of testwork completed on individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organization's general ledger (accounting system). We consider our sample to be representative of the population. The condition appeared to be systemic in nature. Effect: The Organization could make payments to an entity or individual that has been debarred or suspended by the US Government; such costs would be disallowed, and the Organization could face consequences for lack of compliance. Questioned Costs: None noted. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organization adhere to its policy of how screenings will be performed and how contemporaneous documentation will be maintained in order to demonstrate compliance with government regulations.

Information on the Federal Programs: All Programs Criteria: CFR 200.213 states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non-Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; (b) collecting a certification from that person; (c) adding a clause or condition to the covered transaction with that person. Additionally, as outlined in each Department of State award, recipients of U.S. Government funds must adhere to the United States Government’s requirements on screening all potential vendors, suppliers, subcontractors/grantees and employees against the United States Department of State’s Terrorism watch list. The screening of all potential vendors, suppliers, sub-contractors/grantees and employees must be documented in writing. Condition: The Organization did not provide timely/contemporaneous documentation to support its screenings for its potential and current vendors, suppliers, contractors, employees, etc. that were paid with Federal funds during the year under audit. Cause: The Organization did not follow its internal policy with respect to screening vendors, suppliers, contractors and employees in order to adhere to compliance over suspension and debarment. Context: Our audit procedures consisted of testwork completed on individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organization's general ledger (accounting system). We consider our sample to be representative of the population. The condition appeared to be systemic in nature. Effect: The Organization could make payments to an entity or individual that has been debarred or suspended by the US Government; such costs would be disallowed, and the Organization could face consequences for lack of compliance. Questioned Costs: None noted. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organization adhere to its policy of how screenings will be performed and how contemporaneous documentation will be maintained in order to demonstrate compliance with government regulations.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.

Finding 2022-001 Identification of the federal program: Federal Agency: Various Assistance Listing: Various; Research and Development Cluster Award Year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." The Uniform Guidance 2 CFR Section 200.213 states, "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities". Condition: We noted the following matters during our testing of suspension and debarment control processes: (a) A third-party vendor performed the suspension and debarment validation process for Sanford. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. Sanford relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. (b) To ensure compliance with 2 CFR Section 200.213, Sanford conducts both preventive and detective controls in its vendor setup and monitoring process to ensure new vendors and active vendors are not suspended or debarred. A consistent vendor setup process is followed for each new vendor that Sanford transacts with, regardless of whether the vendor transactions are funded through federal grant funding or through other sources. To prevent a suspended or debarred vendor from being added as a new vendor, the vendor is checked against the suspension and debarment database electronically before completion of the vendor setup. Subsequent to vendor setup, Sanford also monitors the status of its vendors to ensure the vendor's status has not changed. Sanford does not retain the supporting documentation that the vendor setup check resulted in no match in the suspension and debarment database indicating the vendor is not suspended or debarred. (c) Sanford did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Sanford to the third-party vendor. Cause: Sanford utilizes a third-party vendor to perform suspension and debarment checks on its vendors, both during the vendor setup process as well as ongoing monitoring of active vendors. Sanford did not add an additional validation control to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match Sanford did not have policies and procedures in place to require that documentation is retained of its suspension and debarment checks performed when a new vendor is set up in the system if the vendor check resulted in no match with the suspension and debarment database indicating the vendor is not suspended or debarred. In addition, Sanford did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed for ongoing monitoring purposes between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Sanford's screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Sanford from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: $0 Context: The federal portion of expenditures subject to suspension and debarment was approximately $1,300,000, which represents approximately 10% of the Research and Development Cluster federal expenditures, of which no vendors were determined to be suspended or debarred. The total amount reported on the SEFA for R&D cluster is $13,361,367. Identification as a repeat finding, if applicable: Not applicable Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Management should implement documentation retention processes to provide evidence over the suspension and debarment search for "new" vendors. In addition, management should implement documentation retention processes over the reconciliation between the vendor list sent to the third-party vendor to document completeness of the suspension and debarment check. Views of responsible officials: 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. To provide context on scale of vendors subject to suspension and debarment, Sanford paid a total of 27,000 vendors in 2022. There were three vendors identified through the vendor setup and monitoring process to be suspended or debarred. None of those vendors were associated with the programs funded with federal funds. Sanford?s preventive 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 vendors that are suspended or disbarred. Sanford believes the risk of any material disbursement to suspended and debarred vendors is effectively mitigated through existing preventive and detective internal controls. Sanford will document a periodic validation of the suspension and debarment search results performed by the third-party vendor for vendor searches that yield no suspension and debarment match. In addition, Sanford will enhance its procedural documentation regarding retention of evidence related to reconciliation of vendor list when discrepancies are identified and the suspension and debarment results that is generated through the vendor setup process.