2024-002 – Material Weakness in Compliance and Internal Control over Procurement and Suspension and Debarment Identification of federal programs: U.S. Department of Housing and Urban Development: #14.251 Economic Development Initiative, Community Project Funding, and Misc. Grants, #B-22-CP-AK-0003 Criteria: Part 3 Compliance Supplement Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. § 200.318(a) Documented procurement procedures – The recipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in §§ 200.317 through 200.327. § 200.318(i) Procurement records - The recipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. § 200.320 Procurement methods – There are three types of procurement methods described: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319. § 200.214 Suspension and debarment – When a non-federal entity enters into a covered transaction, the non-federal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The Organization procured certain goods or services from vendors but did not maintain evidence that they followed their procurement policy or the procurement requirements of the federal program. Cause: The Organization’s purchasing policy does not address all of the procurement requirements of Uniform Guidance. The Organization did not maintain sufficient documentation supporting purchases greater than the micro-purchase threshold or relating to suspension and debarment on certain covered transactions. In the period after year end and before the date of fieldwork, there was turnover in management in the Executive Director position so it is possible that competitive bidding was sought, but that the knowledge and communications have been lost during the transition. Effect or potential effect: The Organization is not in compliance with the procurement requirements of the Uniform Guidance. Questioned Costs: None Context: During the course of the audit of the major program, auditors requested copies of the required support for purchases from three vendors. Support was provided for one of the purchases but could not be located for two of the purchases. Identification of Repeat Finding: Not applicable. Recommendations: We recommend that the Organization reviews and revises their procurement policies and procedures to ensure that they align with the requirements of Uniform Guidance. We also recommend that as part of the Organization’s internal control structure over compliance with procurement requirements, to establish monitoring procedures or checklists to ensure that support is obtained from a sufficient number of qualified sources depending on the purchasing threshold and method required to be used, and that evidence is retained to show that vendors were not suspended or debarred before entering into a transaction with them. Views of Responsible Officials: See Corrective Action Plan
2024-005 - PROCUREMENT, SUSPENSION & DEBARMENT: Procurement Policy Federal Program Information: US Department of Agriculture Direct Award ALN: - 10.760 Water and Waste Disposal Systems for Rural Communities Criteria: Per 2 CFR Section 200.214, non-federal entities are subject to the nonprocurement and suspension regulations restricting awards, subawards, and contracts with certain parties that are debarred or suspended. Condition: The Town does not have a formal procedure to determine that contractors are not debarred, suspended or otherwise excluded or ineligible for participation in Federal assistance programs or activities. Cause: Town personnel were unaware of this requirement. Effect: Transactions could occur that did not comply with federal regulations. Identification of Questioned Costs: None identified. Context: The finding was based on requesting the Town’s policies and procedures related to federal compliance and therefore was not the result of a statistical sample. Repeat Finding: This is a repeat finding of 2023-003. Recommendation: The auditor recommends that the Town obtain an understanding of the required procedures in the Code of Federal Regulations as applicable to its federal programs, create and formally adopt those required procedures. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Town of Bridgewater, Vermont.
NONCOMPLIANCE WITH PROCUREMENT AND SUSPENSION AND DEBARMENT REQUIREMENTS, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, AL No. 21.027, DIRECT ALLOCATION Criteria: Per section 13 of Treasury’s Final Rule FAQs and 2 CFR 200.214, counties must comply with the procurement standards set forth in 2 CFR 200.318 through 2 CFR 200.327, when using their SLFRF award funds to procure goods and services to carry out the objectives of their SLFRF award. In addition, 2 CFR 200.214 prohibits recipients from using SLFRF funds to enter into subawards and contracts with parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs. Condition: The county did not comply with the procurement standards outlined in 2 CFR §200.318-§200.327, which require competitive procurement processes and verification that contractors are not suspended or debarred. Specifically, the county did not verify the eligibility of program recipients/participants/contractors through the System for Award Management (SAM) or equivalent documentation in order to verify that they were not suspended, debarred, or otherwise excluded from participation in the program. Cause: The county does not have procurement policies and procedures in place that allow it to comply with procurement standards outlined in the Uniform Guidance. Effect: Non-compliance with program terms and conditions. Questioned Costs: None Recommendation: Management should develop procedures that will provide reasonable assurance that procurement of goods and services are made in compliance with applicable federal regulations and other procurement requirements specific to a federal award or subaward, and that no subaward, contract, or agreement for purchase of goods or services is made with any suspended or debarred party. Views of responsible officials and planned corrective action: The government agrees with this finding and will adhere to the attached corrective action plan.
Finding Number Compliance Deficiencies 2024-005 Special Education Cluster: Procurement, Suspension, and Debarment Federal Agency: United States Department of Education Federal program Name: Special Education Cluster Assistance Listing Number: 84.024, 84.173 Federal Award Identification Number and Year: Unknown Pass-through Agency: Wisconsin Department of Public Instruction Pass-Through Numbers: 2024-585264-DPI-FLOW-341, 2024-585264-DPI-PRESCH-347 Award Period: 07/01/2023 – 06/30/2024 Compliance Requirements Affected: Procurement, Suspension, and Debarment Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that if the small purchases method is used, price or rate quotations must be obtained from an adequate number of qualified sources (at least 2) and that the procurement is vendor aggregate, not single item. Proposals must be solicited from an adequate number of qualified offerors. For purchases greater than $250,000, either a sealed bid or proposal is required. 2 CFR 200.214 requires non-Federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a non-Federal entity enters into a covered transactions with an entity at a lower tier, the non-Federal entity must verify that the entity, as described in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During our testing of procurement transactions of the program, we noted that the District was not consistently following the procurement policy, specifically related to small purchases threshold. These purchases were not supported by an adequate number of quotes (at least two) or proposals to ensure the District is prudent with the monies used towards the program. Additionally, we noted the District does not have procedures in place for verifying that vendors are not debarred, suspended or otherwise excluded. Questioned costs: None Context: During our testing of procurement transactions of the program, we noted that the District was not consistently following the procurement policy, specifically related to small purchases threshold. In our sample of twelve vendors subject to procurement requirements, we noted the District did not obtain and/or retain documentation for an adequate number of price quotes for one vendor. In our testing of suspension and debarment, we noted that the District did not retain documentation related to suspension and debarment for all three vendors that were selected for testing. Cause: The District did not follow their Federal Funds Procurement and Suspension and Debarment Policy related to appropriate methods of procurement and suspension and debarment. Section III – Findings and Questioned Costs – Major Federal and State Programs (Continued) Finding Number Compliance Deficiencies 2024-005 Special Education Cluster: Procurement, Suspension, and Debarment (Continued) Effect: Obtaining price quotes and proposals from an adequate number of vendors allows the District to use federal funds in the most fiscally responsible way. The lack of price quotes or proposals may cause the District to overpay for supplies or services. Additionally, the District could contract with a vendor that has been suspended or debarred from receiving Federal funds. Repeat Finding: No Recommendation: We recommend that the District review its procedures to ensure that the District’s procurement policy and suspension and debarment policy are being consistently followed. We further recommend that the District require all grant administrators to receive training on Federal procurement and suspension and debarment regulations. View of Responsible Officials: There is no disagreement with this audit finding. See corrective action plan.
Finding Number Compliance Deficiencies 2024-005 Special Education Cluster: Procurement, Suspension, and Debarment Federal Agency: United States Department of Education Federal program Name: Special Education Cluster Assistance Listing Number: 84.024, 84.173 Federal Award Identification Number and Year: Unknown Pass-through Agency: Wisconsin Department of Public Instruction Pass-Through Numbers: 2024-585264-DPI-FLOW-341, 2024-585264-DPI-PRESCH-347 Award Period: 07/01/2023 – 06/30/2024 Compliance Requirements Affected: Procurement, Suspension, and Debarment Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that if the small purchases method is used, price or rate quotations must be obtained from an adequate number of qualified sources (at least 2) and that the procurement is vendor aggregate, not single item. Proposals must be solicited from an adequate number of qualified offerors. For purchases greater than $250,000, either a sealed bid or proposal is required. 2 CFR 200.214 requires non-Federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a non-Federal entity enters into a covered transactions with an entity at a lower tier, the non-Federal entity must verify that the entity, as described in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During our testing of procurement transactions of the program, we noted that the District was not consistently following the procurement policy, specifically related to small purchases threshold. These purchases were not supported by an adequate number of quotes (at least two) or proposals to ensure the District is prudent with the monies used towards the program. Additionally, we noted the District does not have procedures in place for verifying that vendors are not debarred, suspended or otherwise excluded. Questioned costs: None Context: During our testing of procurement transactions of the program, we noted that the District was not consistently following the procurement policy, specifically related to small purchases threshold. In our sample of twelve vendors subject to procurement requirements, we noted the District did not obtain and/or retain documentation for an adequate number of price quotes for one vendor. In our testing of suspension and debarment, we noted that the District did not retain documentation related to suspension and debarment for all three vendors that were selected for testing. Cause: The District did not follow their Federal Funds Procurement and Suspension and Debarment Policy related to appropriate methods of procurement and suspension and debarment. Section III – Findings and Questioned Costs – Major Federal and State Programs (Continued) Finding Number Compliance Deficiencies 2024-005 Special Education Cluster: Procurement, Suspension, and Debarment (Continued) Effect: Obtaining price quotes and proposals from an adequate number of vendors allows the District to use federal funds in the most fiscally responsible way. The lack of price quotes or proposals may cause the District to overpay for supplies or services. Additionally, the District could contract with a vendor that has been suspended or debarred from receiving Federal funds. Repeat Finding: No Recommendation: We recommend that the District review its procedures to ensure that the District’s procurement policy and suspension and debarment policy are being consistently followed. We further recommend that the District require all grant administrators to receive training on Federal procurement and suspension and debarment regulations. View of Responsible Officials: There is no disagreement with this audit finding. See corrective action plan.
Program: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Assistance Listing No.: 10.557 Federal Grantor: U.S. Department of Agriculture Passed-through: California Department of Public Health Award No.: 22-10307 Award Year: 2024 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance and Material Non-Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, states that the 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 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. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. 2 CFR 200.318(i) Procurement records. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.327 Contract provisions. The recipient's or subrecipient's contracts must contain the applicable provisions described in Appendix II to Part 200—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards. Condition: During our testing of the County’s provisions for procurement requirements, we noted the following: 1. For two (2) out of two (2) contracts selected for testing there was no evidence that the County verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract. 2. For two (2) out of two (2) contracts selected for testing, the County did not include all applicable provisions described in 2 CFR 200 Appendix II. 3. For one (1) out of two (2) contracts selected for testing with a contract value of $600,000, the County could not provide documentation of the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. Cause: The County did not follow their policy to verify the information described in the condition prior to entering the transactions. The County did not follow their policy documenting the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. The County’s policy does not include the requirement to include all applicable provisions identified in 2 CFR 200 Appendix II in its contracts. Effect: Failure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred or improper awarding of contracts under the procurement guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of two (2) out of twelve (12) procurement contracts were tested. This represented a total of $2,285,000 in contracted services under the grant. Repeat Finding from Prior Years: No. Recommendation: We recommend the County strengthen its policies and procedures to ensure that the verification of the debarment and suspension is documented and retained, the history of procurement transactions is documented and retained in its official records, and that contracts include all applicable provisions of 2 CFR 200 Appendix II. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Assistance Listing No.: 10.557 Federal Grantor: U.S. Department of Agriculture Passed-through: California Department of Public Health Award No.: 22-10307 Award Year: 2024 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance and Material Non-Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, states that the 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 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. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. 2 CFR 200.318(i) Procurement records. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.327 Contract provisions. The recipient's or subrecipient's contracts must contain the applicable provisions described in Appendix II to Part 200—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards. Condition: During our testing of the County’s provisions for procurement requirements, we noted the following: 1. For two (2) out of two (2) contracts selected for testing there was no evidence that the County verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract. 2. For two (2) out of two (2) contracts selected for testing, the County did not include all applicable provisions described in 2 CFR 200 Appendix II. 3. For one (1) out of two (2) contracts selected for testing with a contract value of $600,000, the County could not provide documentation of the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. Cause: The County did not follow their policy to verify the information described in the condition prior to entering the transactions. The County did not follow their policy documenting the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. The County’s policy does not include the requirement to include all applicable provisions identified in 2 CFR 200 Appendix II in its contracts. Effect: Failure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred or improper awarding of contracts under the procurement guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of two (2) out of twelve (12) procurement contracts were tested. This represented a total of $2,285,000 in contracted services under the grant. Repeat Finding from Prior Years: No. Recommendation: We recommend the County strengthen its policies and procedures to ensure that the verification of the debarment and suspension is documented and retained, the history of procurement transactions is documented and retained in its official records, and that contracts include all applicable provisions of 2 CFR 200 Appendix II. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Assistance Listing No.: 10.557 Federal Grantor: U.S. Department of Agriculture Passed-through: California Department of Public Health Award No.: 22-10307 Award Year: 2024 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance and Material Non-Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, states that the 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 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. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. 2 CFR 200.318(i) Procurement records. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.327 Contract provisions. The recipient's or subrecipient's contracts must contain the applicable provisions described in Appendix II to Part 200—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards. Condition: During our testing of the County’s provisions for procurement requirements, we noted the following: 1. For two (2) out of two (2) contracts selected for testing there was no evidence that the County verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract. 2. For two (2) out of two (2) contracts selected for testing, the County did not include all applicable provisions described in 2 CFR 200 Appendix II. 3. For one (1) out of two (2) contracts selected for testing with a contract value of $600,000, the County could not provide documentation of the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. Cause: The County did not follow their policy to verify the information described in the condition prior to entering the transactions. The County did not follow their policy documenting the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. The County’s policy does not include the requirement to include all applicable provisions identified in 2 CFR 200 Appendix II in its contracts. Effect: Failure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred or improper awarding of contracts under the procurement guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of two (2) out of twelve (12) procurement contracts were tested. This represented a total of $2,285,000 in contracted services under the grant. Repeat Finding from Prior Years: No. Recommendation: We recommend the County strengthen its policies and procedures to ensure that the verification of the debarment and suspension is documented and retained, the history of procurement transactions is documented and retained in its official records, and that contracts include all applicable provisions of 2 CFR 200 Appendix II. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 Health Center Program Cluster Assistance Listing No.: 93.224; 93.527 Federal Grantor: U.S. Department of Health and Human Services Passed-through: N/A Award No.: 4 H8GCS48295‐01‐01 Award Year: 12/01/2022 ‐ 12/31/2023 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance and Material Non-Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, states that the 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 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. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. 2 CFR 200.318(i) Procurement records. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.327 Contract provisions. The recipient's or subrecipient's contracts must contain the applicable provisions described in Appendix II to Part 200—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards. Condition: During our testing of the County’s provisions for procurement requirements, we noted the following: 1. For one (1) out of three (3) contracts selected for testing, there was no evidence that the County verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract. 2. For one (1) out of three (3) contracts selected for testing, the County did not include all applicable provisions described in 2 CFR 200 Appendix II. 3. For one (1) out of three (3) contracts selected for testing with a total contract value of $2,616,000, the County could not provide documentation of the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. Cause: The County did not follow their policy to verify the information described in the condition prior to entering the transactions. The County did not follow their policy documenting the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. The County’s policy does not include the requirement to include all applicable provisions identified in 2 CFR 200 Appendix II in its contracts. Effect: Failure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred or improper awarding of contracts under the procurement guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of three (3) out of three (3) procurement contracts were tested. This represented a total of $21,679,640 in contracted services under the grant. Repeat Finding from Prior Years: No. Recommendation: We recommend the County strengthen its policies and procedures to ensure that the verification of the debarment and suspension is documented and retained, the history of procurement transactions is documented and retained in its official records, and that contracts include all applicable provisions of 2 CFR 200 Appendix II. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 Health Center Program Cluster Assistance Listing No.: 93.224; 93.527 Federal Grantor: U.S. Department of Health and Human Services Passed-through: N/A Award No.: 4 H8GCS48295‐01‐01 Award Year: 12/01/2022 ‐ 12/31/2023 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance and Material Non-Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, states that the 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 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. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. 2 CFR 200.318(i) Procurement records. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.327 Contract provisions. The recipient's or subrecipient's contracts must contain the applicable provisions described in Appendix II to Part 200—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards. Condition: During our testing of the County’s provisions for procurement requirements, we noted the following: 1. For one (1) out of three (3) contracts selected for testing, there was no evidence that the County verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract. 2. For one (1) out of three (3) contracts selected for testing, the County did not include all applicable provisions described in 2 CFR 200 Appendix II. 3. For one (1) out of three (3) contracts selected for testing with a total contract value of $2,616,000, the County could not provide documentation of the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. Cause: The County did not follow their policy to verify the information described in the condition prior to entering the transactions. The County did not follow their policy documenting the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. The County’s policy does not include the requirement to include all applicable provisions identified in 2 CFR 200 Appendix II in its contracts. Effect: Failure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred or improper awarding of contracts under the procurement guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of three (3) out of three (3) procurement contracts were tested. This represented a total of $21,679,640 in contracted services under the grant. Repeat Finding from Prior Years: No. Recommendation: We recommend the County strengthen its policies and procedures to ensure that the verification of the debarment and suspension is documented and retained, the history of procurement transactions is documented and retained in its official records, and that contracts include all applicable provisions of 2 CFR 200 Appendix II. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 Health Center Program Cluster Assistance Listing No.: 93.224; 93.527 Federal Grantor: U.S. Department of Health and Human Services Passed-through: N/A Award No.: 4 H8GCS48295‐01‐01 Award Year: 12/01/2022 ‐ 12/31/2023 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance and Material Non-Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, states that the 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 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. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. 2 CFR 200.318(i) Procurement records. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.327 Contract provisions. The recipient's or subrecipient's contracts must contain the applicable provisions described in Appendix II to Part 200—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards. Condition: During our testing of the County’s provisions for procurement requirements, we noted the following: 1. For one (1) out of three (3) contracts selected for testing, there was no evidence that the County verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract. 2. For one (1) out of three (3) contracts selected for testing, the County did not include all applicable provisions described in 2 CFR 200 Appendix II. 3. For one (1) out of three (3) contracts selected for testing with a total contract value of $2,616,000, the County could not provide documentation of the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. Cause: The County did not follow their policy to verify the information described in the condition prior to entering the transactions. The County did not follow their policy documenting the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. The County’s policy does not include the requirement to include all applicable provisions identified in 2 CFR 200 Appendix II in its contracts. Effect: Failure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred or improper awarding of contracts under the procurement guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of three (3) out of three (3) procurement contracts were tested. This represented a total of $21,679,640 in contracted services under the grant. Repeat Finding from Prior Years: No. Recommendation: We recommend the County strengthen its policies and procedures to ensure that the verification of the debarment and suspension is documented and retained, the history of procurement transactions is documented and retained in its official records, and that contracts include all applicable provisions of 2 CFR 200 Appendix II. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 Health Center Program Cluster Assistance Listing No.: 93.224; 93.527 Federal Grantor: U.S. Department of Health and Human Services Passed-through: N/A Award No.: 4 H8GCS48295‐01‐01 Award Year: 12/01/2022 ‐ 12/31/2023 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance and Material Non-Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, states that the 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 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. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. 2 CFR 200.318(i) Procurement records. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.327 Contract provisions. The recipient's or subrecipient's contracts must contain the applicable provisions described in Appendix II to Part 200—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards. Condition: During our testing of the County’s provisions for procurement requirements, we noted the following: 1. For one (1) out of three (3) contracts selected for testing, there was no evidence that the County verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract. 2. For one (1) out of three (3) contracts selected for testing, the County did not include all applicable provisions described in 2 CFR 200 Appendix II. 3. For one (1) out of three (3) contracts selected for testing with a total contract value of $2,616,000, the County could not provide documentation of the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. Cause: The County did not follow their policy to verify the information described in the condition prior to entering the transactions. The County did not follow their policy documenting the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. The County’s policy does not include the requirement to include all applicable provisions identified in 2 CFR 200 Appendix II in its contracts. Effect: Failure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred or improper awarding of contracts under the procurement guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of three (3) out of three (3) procurement contracts were tested. This represented a total of $21,679,640 in contracted services under the grant. Repeat Finding from Prior Years: No. Recommendation: We recommend the County strengthen its policies and procedures to ensure that the verification of the debarment and suspension is documented and retained, the history of procurement transactions is documented and retained in its official records, and that contracts include all applicable provisions of 2 CFR 200 Appendix II. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; City of Urbana, Illinois Pass-Through Number(s): 20220245; 02220246; 2224-FF-CO Award Period: 7/1/2023-12/31/2026; 3/1/2023-12/30/2023; 12/15/2023-12/31/2024; 3/1/2022-12/31/2023; 3/1/2022-12/31/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: § 200.214 Suspension and debarment indicates nonfederal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 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: The Organization did not perform the search of suspension and debarment, so it did not meet the requirements of the Uniform Guidance. As a result, the Organization could not provide supporting documentation showing that engaged vendors had gone through an appropriate suspension and debarment process. Questioned costs: N/A Context: 4 of 4 vendors selected for testing suspension and debarment, did not have documentation showing that suspension and debarment had been checked prior to entering into a contract. Cause: Error by management in understanding Uniform Guidance requirements. Effect: Lack of appropriate suspension and debarment policies could result in the Organization engaging vendors who are debarred from doing business with the United States Government and/or using federal funds in manner that is not the most efficient or economical. Repeat Finding: Repeat Finding of 2023-004. Recommendation: We recommend the Organization revised its internal controls related to suspension and debarment such that they align with the requirements of the Uniform Guidance. Views of responsible officials: The Organization has added a Procurement, Suspension and Debarment policy and will continue to verify contractors as required. The Organization will improve on documentation procedures for these verifications.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; City of Urbana, Illinois Pass-Through Number(s): 20220245; 02220246; 2224-FF-CO Award Period: 7/1/2023-12/31/2026; 3/1/2023-12/30/2023; 12/15/2023-12/31/2024; 3/1/2022-12/31/2023; 3/1/2022-12/31/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: § 200.214 Suspension and debarment indicates nonfederal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 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: The Organization did not perform the search of suspension and debarment, so it did not meet the requirements of the Uniform Guidance. As a result, the Organization could not provide supporting documentation showing that engaged vendors had gone through an appropriate suspension and debarment process. Questioned costs: N/A Context: 4 of 4 vendors selected for testing suspension and debarment, did not have documentation showing that suspension and debarment had been checked prior to entering into a contract. Cause: Error by management in understanding Uniform Guidance requirements. Effect: Lack of appropriate suspension and debarment policies could result in the Organization engaging vendors who are debarred from doing business with the United States Government and/or using federal funds in manner that is not the most efficient or economical. Repeat Finding: Repeat Finding of 2023-004. Recommendation: We recommend the Organization revised its internal controls related to suspension and debarment such that they align with the requirements of the Uniform Guidance. Views of responsible officials: The Organization has added a Procurement, Suspension and Debarment policy and will continue to verify contractors as required. The Organization will improve on documentation procedures for these verifications.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; City of Urbana, Illinois Pass-Through Number(s): 20220245; 02220246; 2224-FF-CO Award Period: 7/1/2023-12/31/2026; 3/1/2023-12/30/2023; 12/15/2023-12/31/2024; 3/1/2022-12/31/2023; 3/1/2022-12/31/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: § 200.214 Suspension and debarment indicates nonfederal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 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: The Organization did not perform the search of suspension and debarment, so it did not meet the requirements of the Uniform Guidance. As a result, the Organization could not provide supporting documentation showing that engaged vendors had gone through an appropriate suspension and debarment process. Questioned costs: N/A Context: 4 of 4 vendors selected for testing suspension and debarment, did not have documentation showing that suspension and debarment had been checked prior to entering into a contract. Cause: Error by management in understanding Uniform Guidance requirements. Effect: Lack of appropriate suspension and debarment policies could result in the Organization engaging vendors who are debarred from doing business with the United States Government and/or using federal funds in manner that is not the most efficient or economical. Repeat Finding: Repeat Finding of 2023-004. Recommendation: We recommend the Organization revised its internal controls related to suspension and debarment such that they align with the requirements of the Uniform Guidance. Views of responsible officials: The Organization has added a Procurement, Suspension and Debarment policy and will continue to verify contractors as required. The Organization will improve on documentation procedures for these verifications.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; City of Urbana, Illinois Pass-Through Number(s): 20220245; 02220246; 2224-FF-CO Award Period: 7/1/2023-12/31/2026; 3/1/2023-12/30/2023; 12/15/2023-12/31/2024; 3/1/2022-12/31/2023; 3/1/2022-12/31/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: § 200.214 Suspension and debarment indicates nonfederal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 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: The Organization did not perform the search of suspension and debarment, so it did not meet the requirements of the Uniform Guidance. As a result, the Organization could not provide supporting documentation showing that engaged vendors had gone through an appropriate suspension and debarment process. Questioned costs: N/A Context: 4 of 4 vendors selected for testing suspension and debarment, did not have documentation showing that suspension and debarment had been checked prior to entering into a contract. Cause: Error by management in understanding Uniform Guidance requirements. Effect: Lack of appropriate suspension and debarment policies could result in the Organization engaging vendors who are debarred from doing business with the United States Government and/or using federal funds in manner that is not the most efficient or economical. Repeat Finding: Repeat Finding of 2023-004. Recommendation: We recommend the Organization revised its internal controls related to suspension and debarment such that they align with the requirements of the Uniform Guidance. Views of responsible officials: The Organization has added a Procurement, Suspension and Debarment policy and will continue to verify contractors as required. The Organization will improve on documentation procedures for these verifications.
Federal Agency: U.S. Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Numbers: 10.553 and 10.555 Federal Award Identification Number and Year: 2023; Federal Award Identification Number not available. Pass-Through Agency: Massachusetts Department of Elementary and Secondary Education Pass-Through Number: 03-292 Award Period: July 1, 2023 through June 30, 2024 Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria or specific requirement: Title 2 of the U.S. Code of Federal Regulations (CFR), Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Internal controls should be designed and implemented to prevent or detect noncompliance with this requirement. Condition: Swansea Public Schools (SPS) did not obtain evidence supporting their verification that entities were not suspended, debarred, or otherwise excluded from participating in the grant award transactions. Questioned costs: None. Context: The SPS did not obtain evidence of verification of the suspension and debarment status for one (1) of two (2) entities in our sample to which the SPS incurred expenditures in excess of $25,000. Cause: Internal controls were not implemented to ensure documented evidence was obtained regarding the suspension and debarment status for all entities receiving federal funds in excess of $25,000 from SPS. Effect: Risk of noncompliance with the federal award program was elevated. It was later verified the entities in question were not suspended or debarred. Repeat Finding: No. Recommendation: We recommend SPS ensure documentation be obtained supporting the suspension and debarment status of entities to which the SPS expends greater than $25,000. Such documentation could include (1) a history of searching SAM.gov exclusions, (2) certification from the entity, or (3) a clause or condition included in the contract or subaward with the entity. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding Reference Number: 2024-008. Federal Program: AL 21.027 – COVID-19 - Coronavirus State and Local Recovery Funds. Passed through Entity: County of St. Joseph, Indiana. Compliance Requirements: Procurement, Suspension, and Debarment. Type of Finding : Significant Deficiency in Internal Controls over Compliance. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires nonfederal entities to have a procurement policy in accordance with the Uniform Guidance requirements. 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters a covered transaction with an entity at a lower tier, the nonfederal entity must verify the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition and Context: There is no procedure in place to determine whether vendors are suspended or debarred. For our sample of one, representing the entire population, the entity did not have documentation to support a check of a suspension and debarment on the vendor it entered into a transaction. Questioned Costs: No costs are required to be questioned as a result of this finding as none of the vendors or subrecipients involved were actually suspended or debarred. Cause: The Organization did not have a procedure in place to require documentation be maintained that the search for suspension and debarment associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect or Potential Effect: Costs charged to federal awards could be paid to a person/vendor that has been debarred or suspended by the Federal government. This could lead to costs charged to the federal award to be subject to disallowance resulting in noncompliance. Recommendation: We recommend the Organization implement a policy over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. Views of responsible officials: Management acknowledges the finding and understands the need to perform a review of vendors paid using federal grant funds to determine if they are suspended or debarred.
Prior Year Finding: 2023-005 Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2023 - 6/30/2024) Compliance Requirement: Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) 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 comply with the 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 section 200.214 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. Per 2 CFR section 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM Exclusion; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Condition/Context: The suspension and debarment status of five out of five vendors with expenditures exceeding $25,000 was not verified as required by federal regulation. Questioned Costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The Towns internal controls were not sufficient to ensure federal suspension and debarment regulations were followed for purchases made for the program. Effect: Failure to adhere to suspension and debarment requirements may result in the Town entering into a contract or purchase with a vendor that is suspended or debarred and not authorized to provide goods and services to the program. Recommendation: We recommend that the Town enhance its procedures and internal controls to ensure that it verifies vendors are not suspended or debarred from business prior to all goods and services charged to the program. The Town should retain documentation of procurement suspension/debarment status verifications for its vendors audit purposes. Views of Responsible Officials: Management agrees with the finding.
2024-004 U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds - ALN 21.027 Material Weakness in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Suspension and debarment compliance was not verified for three covered transactions. Cause: Lack of appropriate oversight resulted in required suspension and debarment checks not being performed. Effect: Grant transactions are not supported adequately, and the Town is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. It was determined that none of the three vendors were suspended or debarred from federal awards. Questioned Costs: None Repeat Finding from Prior Year: No. Recommendation: The Town should implement procedures to document that all contractors under covered transactions that are performing services for the grant are not suspended or debarred. Views of Responsible Official: Management agrees with the finding.
2024-004 U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds - ALN 21.027 Material Weakness in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Suspension and debarment compliance was not verified for three covered transactions. Cause: Lack of appropriate oversight resulted in required suspension and debarment checks not being performed. Effect: Grant transactions are not supported adequately, and the Town is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. It was determined that none of the three vendors were suspended or debarred from federal awards. Questioned Costs: None Repeat Finding from Prior Year: No. Recommendation: The Town should implement procedures to document that all contractors under covered transactions that are performing services for the grant are not suspended or debarred. Views of Responsible Official: Management agrees with the finding.
Finding Reference No.: 2024-001 Assistance Listing Number: 21.027 Program Title: COVID-19 - Coronavirus State and Local Fiscal Recovery Fund Finding: Suspension & Debarment Questioned Costs: Not Applicable Criteria: Title 2 U.S. Code of Federal Regulations Part 200.214 Suspension and Debarment states recipients and subrecipients are subject to the debarment and suspension regulations described in 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Condition: The Town did not provide evidence to support verification that entities were not suspended or debarred was performed. Cause: The Town does not have procedures and/or policies in place regarding verification for suspended or debarred entities. Effect: The Town may enter into contracts with entities that are suspended or debarred, which could result in noncompliance with federal requirements and the possibility of the reduction grant funding. Questioned Costs: No questioned costs were identified. Recommendation: We recommend the Town implement policies and procedures regarding verification of entity suspension and debarment. Repeat Finding: This is not a repeat finding. Views of Responsible Officials: See corrective action plan attached.
Condition: Expenditures for federal programs did not follow the non-federal entities procedures before entering a covered transaction. Two (2) disbursements totaling $28,882 were not properly encumbered in accordance with state statute. Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are made in accordance with federal compliance requirements. Effect of Condition: This condition could result in noncompliance to grant requirements and could lead to a loss of federal funds to the County. Recommendation: OSAI recommends the County gain an understanding of the grant requirements for this program and implement internal controls to ensure compliance with these grant requirements. Management Response: Chairman of the Board of County Commissioners: I plan to communicate with the Budget Board regarding this finding and have already introduced to the Budget Board, a form guideline called “Payne County Grant Administration Plan” to aid in proper documentation, reporting and proper spending of all grant awards. County Clerk: The Payne County Budget Board has approved and adopted a Federal Funding Checklist as well as Federal Funding guidelines on agreements and awards. The Payne County Clerk’s office also communicates with each department and requests that they report to our office any Federal Grants and Awards they receive and report those on their SEFA annually to our office. We also communicate with the Treasurer’s office and request to know when any Federal money has been received. Criteria: Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds (8. Procurement, Suspension & Debarment.) reads as follows: Recipients are responsible for ensuring that any procurement using SLFRF funds, or payments under procurement contracts using such funds, are consistent with the procurement standards set forth in the Uniform Guidance at 2 CFR 200.317 through 2 CFR 200.327, unless stated otherwise by Treasury. As outlined in FAQ 13.15, only a subset of the Uniform Guidance requirements at 2 CFR Part 200 Subpart D (Post Federal AwardRequirements) applies to recipients’ use of funds in the revenue loss eligible use category. The procurement standards set forth in the Uniform Guidance at 2 CRF 200.317 through 2 CRF 200.327 are not included in FAQ 13.15’s list of applicable Subpart D requirements that apply to recipients’ use of funds in the revenue loss eligible use category. The Uniform Guidance establishes in 2 CFR 200.319 that all procurement transactions for property or services must be conducted in a manner providing full and open competition, consistent with standards outlined in 2 CFR 200.320, which allows for non-competitive procurements only in certain circumstances. Recipients must have and use documented procurement procedures that are consistent with the standards outlined in 2 CFR 200.317 through 2 CFR 200.320. In addition, the Uniform Guidance at 2 CFR 200.214, 2 CFR Part 180, and Treasury’s implementing regulations at 31 CFR Part 19, prohibit recipients from entering into contracts with suspended or debarred parties. The procurement standards outlined in the Uniform Guidance require an infrastructure for competitive bidding and contractor oversight, including maintaining written standards of conduct. Your organization must ensure adherence to all applicable local, State, and federal procurement laws and regulations. Further, 2 CFR § 200.319 Competition (d) reads as follows: The non-Federal entity must have written procedures for procurement transactions.
2024-001 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Child Nutrition Cluster – ALN 10.553, 10.555 & 10.559 Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.319, procurements must provide for full and open competition. Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: The District utilized prices that were competitively procured by French River Collaborative, of which it is a member, and did not obtain individual contracts with the five vendors. Additionally, the District only obtained one of the four required suspension and debarment certifications. Cause: The District did not follow federal award policies and procedures for contract management and suspension and debarment verification when procuring school lunch goods and services. Effect: The District might not obtain the proper negotiated rates that were part of the competitive procurement. The District is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. It was determined that none of the three vendors were suspended or debarred from federal awards. Questioned Costs: None Repeat Finding from Prior Year: Yes; Finding 2023-001 Recommendation: The District should obtain individual contracts with vendors that were competitively procured by the Collaborative and require those vendors to attest on suspension and debarment certifications, for all applicable purchases of goods and services. Views of Responsible Official: Management agrees with the finding.
2024-004 U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds - ALN 21.027 Significant Deficiency in Internal Controls Over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Suspension and debarment compliance was not verified for five vendors. Cause: Lack of formal federal procurement policies and procedures and resulted in required suspension and debarment checks not being performed. Effect: The Town is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. It was determined that none of the five vendors were suspended or debarred from federal awards. Questioned Costs: None Repeat Finding from Prior Year: No Recommendation: The Town should implement procedures to document that all contractors under covered transactions that are performing services for the grant are not suspended or debarred. Views of Responsible Official: Management agrees with the finding.
2024-003: Suspension and Debarment Verification Assistance Listing Number (ALN) and Title: 20.205 Highway Planning and Construction Federal Grantor: U.S. Department of Transportation (DOT) Passed-through: Oregon Department of Transportation (ODOT) Award Identification Numbers and Years: Finding is applicable to all 20.205 awards on the SEFA for 2024 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control over Compliance Prior Year Audit Finding: No Criteria: 2 CFR 200.214 prohibits non-federal entities from contracting with or making subawards to parties listed on the governmentwide suspension and debarment list. 2 CFR 200.318(h) requires non-federal entities to verify that vendors are not suspended or debarred before entering into covered transactions (e.g., procurements expected to equal or exceed $25,000). This verification is typically done by checking the System for Award Management (SAM.gov) or collecting a certification from the entity. Prudent practice and effective internal control require documentation of these verification procedures and results. Condition: LCOG did not maintain documentation to demonstrate that it verified whether certain vendors paid with ALN 20.205 funds were excluded or disqualified under the suspension and debarment rules. While management stated they performed reviews of the SAM.gov listing prior to expenditure, no evidence (such as dated screenshots, search results printouts, or certifications) was available to support that the required verifications were performed for tested vendors. Questioned Costs: None. Context: During compliance testing for ALN 20.205, we selected a sample of two covered transactions. No other covered transactions were procured during FY 2024. LCOG could not provide documentation of its verification process for one the vendors in these transactions. Subsequent review of SAM.gov performed during the audit did not indicate the vendor had been suspended or debarred. Cause: LCOG has not implemented formal procedures requiring the retention of documentation demonstrating suspension and debarment checks for vendors paid with federal funds. Effect: Without documented verification, LCOG cannot demonstrate compliance with federal suspension and debarment requirements. While no ineligible vendors were identified in our sample, the lack of documented procedures and evidence represents a failure in the design or operation of internal controls, increasing the risk that LCOG could inadvertently contract with a suspended or debarred party using federal funds in the future. Recommendation: We recommend LCOG establish and implement formal, documented procedures for verifying that vendors are not suspended or debarred before entering into covered transactions paid with federal funds. These procedures should specify the method of verification (e.g., checking SAM.gov) and require retention of evidence (e.g., dated printouts or screenshots of the search results) within the procurement or vendor files. Auditee Views: The suspension and debarment check during the procurement process is one of the steps completed by the Procurement Officer for any covered transaction that is not the subject of a formal procurement. The Executive Director completed this check. For the one vendor referenced above, a sole source contract was to be awarded and the check for suspension and debarment of the vendor was completed by reviewing entity records in SAM.gov. The review of SAM.gov records did not disclose any suspensions or debarments of the vendor. In the future, we will take a screen shot of the result and place it in the procurement file. This will become part of the process immediately for any procurements that are not formal RFPs. Formal RFPs require vendors to certify that they are not suspended or debarred.
LACK OF PROCEDURES TO ENSURE PROPER SUSPENSION AND DEBARMENT REQUIREMENTS Program: AL 21.027 – COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Suspension & Debarment Grant: SLFRP0923, March 3, 2021, through December 31, 2024 Federal Grantor: U.S. Department of the Treasury Criteria: Title 2 of the U.S. Code of Federal Regulations (CFR) § 200.303 (January 1, 2023) states the following, in relevant part: The 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). The U.S. Department of the Treasury adopted the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR § 1000.10 (January 1, 2023), which states the following: Except for the deviations set forth elsewhere in this Part, the Department of the Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, set forth at 2 CFR part 200. 2 CFR § 200.214 (January 1, 2023) states the following: Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 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. 2 CFR § 180.300 (January 1, 2023) requires non-Federal entities to verify that an entity is not excluded or disqualified prior to entering into a covered transaction by: “(a) Checking SAM Exclusions; or (b) Collecting a certification from that . . . [entity]; or (c) Adding a clause or condition to the covered transaction with that . . . [entity].” A good internal control plan requires the County to have proper procedures in place to verify that contractors paid with Federal funds are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities. Condition: The County did not have controls in place to ensure that suspension and debarment requirements were followed and adequately documented. We noted the County used Coronavirus State and Local Fiscal Recovery Funds to pay ten vendors over $25,000 each, totaling $2,788,905, during the fiscal year ended June 30, 2024. The County failed to ensure that these vendors were not excluded or disqualified prior to entering into these covered transactions. Context: The County did not have a system in place to ensure proper application of the federal guidelines for the federal disbursements. Effect: Without adequate procedures to ensure contractors are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, there is an increased risk for the misuse of Federal funds and noncompliance with Federal regulations, leading to possible Federal sanctions. Cause: Lack of procedures and knowledge regarding suspension and debarment requirements. Questioned Costs: None Repeat Finding: Yes Recommendation: We recommend the County implement procedures to ensure, prior to entering into a covered transaction, that a contractor is not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, and those procedures are adequately documented. View of Officials: The County will implement procedures to ensure when a contractor is paid with federal funds, sam.gov will be utilized to verify the entity has not been suspended or debarred and such procedure will be adequately documented.
2024-002 U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027 Significant Deficiency in Internal Controls Over Compliance and Other Matter Finding Criteria: Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Suspension and debarment compliance was not verified for four covered transactions. Cause: Lack of appropriate oversight resulted in required suspension and debarment checks not being performed. Effect: Grant transactions are not supported adequately, and the Town is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. It was determined that none of the four vendors were suspended or debarred from federal awards. Questioned Costs: None Repeat Finding from Prior Year: No. Recommendation: The Town should implement procedures to document that all contractors under covered transactions that are performing services for the grant are not suspended or debarred.
NONCOMPLIANCE WITH PROCUREMENT AND SUSPENSION AND DEBARMENT REQUIREMENTS, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, ASSISTANCE LISTING No. 21.027, DIRECT ALLOCATION, GRANT No. AM-23-0295, YEAR ENDED JUNE 30, 2024 Criteria: Per 2 CFR 200.214, non-Federal entities are subject to the non-procurement, debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 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: The city did not comply with the procurement standards outlined in 2 CFR §200.318-§200.327, which require competitive procurement processes and verification that contractors are not suspended or debarred. Specifically, the city did not verify the eligibility of program recipients/participants/contractors through the System for Award Management (SAM) or equivalent documentation in order to verify that they were not suspended, debarred, or otherwise excluded from participation in the program. Cause: The city does not have procurement policies and procedures in place that allow it to comply with procurement standards outlined in the Uniform Guidance. Effect: Non-compliance with program terms and conditions. Questioned Costs: None Recommendation: Management should develop procedures that will provide reasonable assurance that procurement of goods and services are made in compliance with applicable federal regulations and other procurement requirements specific to a federal award or subaward, and that no subaward, contract, or agreement for purchase of goods or services is made with any suspended or debarred party. Views of responsible officials and planned corrective action: The government agrees with this finding and will adhere to the attached corrective action plan.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Opioid STR Assistance Listing Number: 93.788 Federal Award Identification Number and Year: 167552 - 2024 Pass-Through Agency: Oregon Health Authority Pass-Through Number(s): 167552 Award Period: January 4, 2021, through September 29, 2024 Type of Finding: Material Weakness in Internal Controls over Compliance and Material Noncompliance: Procurement, Suspension and Debarment Criteria or specific requirement: 2 CFR Part 200 sections 200.214 and 200.318-327 outlines the required general procurement standards, competition, and methods of procurement to be followed. These elements must be incorporated into an organization’s procurement policies and must be followed to ensure procurements are supported and covered transactions are only entered into with entities that are not federally suspended or debarred. Condition: The Alliance does not have formal procurement or suspension and debarment policy. For the sampled procurement transactions, documentation was not retained supporting the determination that the vendors were single source providers, as required by Uniform Guidance. In addition, a suspension and debarment check was not performed before entering into the covered transaction. Questioned costs: Yes Known: $9,239 Likely: $39,740 Context: The Organization does not have written procurement policies nor suspension and debarment policies. CLA tested six procurement transactions charged to the major program. For the sampled procurement transactions, documentation was not retained detailing the history of the procurement, including: the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. Documentation should be retained to evidence the adequate number of price comparisons, price analyses, and rationale of acquisition, including to limit competition where competition is limited or contractor is single source. In addition, five covered transactions were tested for suspension and debarment. Documentation was not retained showing selected entities were checked for suspension and debarment prior to entering into the covered transactions. Cause: Due to a lack of knowledge about federal procurement, suspension and debarment, and documentation requirements. Effect: There is an increased possibility of entering into a covered transaction with vendors/contractors who are federally suspended or debarred. Without adequate records retained, the Alliance is at risk of noncompliance with federal suspension and debarment requirements. Repeat Finding: No Recommendation: CLA recommends the Alliance to develop the procurement policy compliance in with Uniform Guidance, including such documentation as the procurement threshold of the transaction, price comparisons and analyses made, bids obtained, proof of any limited competition, dated vendor screenings and signed authorization of the appropriate program personnel. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within the Alliance. The Alliance also needs to ensure that the policy includes suspension, and debarment checks, and it should be done prior to entering into the program. Each type of disbursement that leaves the Alliance (check, ACH, EFT, credit card, etc.) to improve documentary evidence that costs are being reviewed and approved for appropriateness. Views of responsible officials: There is no disagreement with the audit finding.
U.S. Department of Health and Human Services, passed through the Curators of the University of Missouri ALN 93.680 - Medical Student Education PTE Federal Award No: C00084599-1 Criteria or Specific Requirement: Suspension and Debarment and Significant Deficiency In accordance with 2 CFR 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Suspension and debarment checks were not completed for the vendors that received federal funds. Cause: Bothwell Regional Health Center did not have suspension and debarment controls in place prior to purchases with the vendors. Effect or Potential Effect: Federal funds could be paid to entities that are suspended or debarred. Questioned Costs: None noted. Context: Only one vendor was subject to the suspension and debarment requirement in 2024 and was selected for testing. The Health Center purchased $961,978 in goods/services from this vendor in 2024. During our testing, we noted the vendor utilized by the Health Center was not evaluated for suspension and debarment. Upon subsequent check, the vendor was not suspended or debarred. Identification of Prior Year Finding: N/A Recommendation: Policies and procedures should be modified to ensure that suspension and debarment checks are performed on vendors and subrecipients alike prior to making purchases with federal funds. When newly established programs include vendors, we also recommend the contracts include suspension and debarment language. View of Responsible Official and Planned Corrective Actions: Management agrees with the finding and management will implement a control process to ensure that suspension and debarment checks are performed on vendors/contracts funded with grants in 2025.
U.S. Department of Health and Human Services, passed through the Curators of the University of Missouri ALN 93.680 - Medical Student Education PTE Federal Award No: C00084599-1 Criteria or Specific Requirement: Suspension and Debarment and Significant Deficiency In accordance with 2 CFR 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Suspension and debarment checks were not completed for the vendors that received federal funds. Cause: Bothwell Regional Health Center did not have suspension and debarment controls in place prior to purchases with the vendors. Effect or Potential Effect: Federal funds could be paid to entities that are suspended or debarred. Questioned Costs: None noted. Context: Only one vendor was subject to the suspension and debarment requirement in 2024 and was selected for testing. The Health Center purchased $961,978 in goods/services from this vendor in 2024. During our testing, we noted the vendor utilized by the Health Center was not evaluated for suspension and debarment. Upon subsequent check, the vendor was not suspended or debarred. Identification of Prior Year Finding: N/A Recommendation: Policies and procedures should be modified to ensure that suspension and debarment checks are performed on vendors and subrecipients alike prior to making purchases with federal funds. When newly established programs include vendors, we also recommend the contracts include suspension and debarment language. View of Responsible Official and Planned Corrective Actions: Management agrees with the finding and management will implement a control process to ensure that suspension and debarment checks are performed on vendors/contracts funded with grants in 2025.
Finding: Suspension and Debarment U.S. Department of the Treasury Passed through Missouri Primary Care Association Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Fund Award Year: 2022 Award Number: SLFPR4542 Criteria or Specific Requirement In accordance with 2 CFR 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. "Covered transactions" include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. Part 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Proper verification of vendors was not occurring prior to purchase to determine whether vendors were suspended or debarred. Questioned Costs - None noted. Context: One transaction selected for testing the suspension and debarment verification occurred subsequent to the purchase. Identification of Prior Year Finding: N/A Effect: Federal funds could be paid to entities that are suspended or debarred. Cause: Vendors subject to suspension and debarment requirements are entered into Compilatric, a 3rd party software, to run monthly exclusion checks. Compilatric checks with the OIG, SAM, and GAS, plus about 35 other state and federal databases that host suspended and disbarred lists. The purchase from this vendor was not communicated to the correct department timely and a check was inadvertently missed. Recommendation: We recommend that the Health Center communicate to all departments that purchases using federal funds have suspension and debarment checks completed prior to purchase. View of Responsible Official and Planned Corrective Actions: The Health Center agrees with the finding. See separate report for planned corrective actions.
2024-003 – Procurement, Suspension and Debarment Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment). Program. COVID-19 - Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; Assistance Listing Number 21.027, All Award Numbers Criteria. 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition. There is no procedure in place to determine whether vendors are suspended or debarred. Cause. The Organization did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect. Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as none of the vendors or subrecipients involved were actually suspended or debarred. Recommendation. We recommend that the Organization review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.
2024-003 – Procurement, Suspension and Debarment Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment). Program. COVID-19 - Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; Assistance Listing Number 21.027, All Award Numbers Criteria. 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition. There is no procedure in place to determine whether vendors are suspended or debarred. Cause. The Organization did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect. Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as none of the vendors or subrecipients involved were actually suspended or debarred. Recommendation. We recommend that the Organization review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.
2024-003 – Procurement, Suspension and Debarment Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment). Program. COVID-19 - Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; Assistance Listing Number 21.027, All Award Numbers Criteria. 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition. There is no procedure in place to determine whether vendors are suspended or debarred. Cause. The Organization did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect. Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as none of the vendors or subrecipients involved were actually suspended or debarred. Recommendation. We recommend that the Organization review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.
2024-003 – Procurement, Suspension and Debarment Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment). Program. COVID-19 - Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; Assistance Listing Number 21.027, All Award Numbers Criteria. 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition. There is no procedure in place to determine whether vendors are suspended or debarred. Cause. The Organization did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect. Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as none of the vendors or subrecipients involved were actually suspended or debarred. Recommendation. We recommend that the Organization review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.
2024-003 – Procurement, Suspension and Debarment Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment). Program. COVID-19 - Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; Assistance Listing Number 21.027, All Award Numbers Criteria. 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition. There is no procedure in place to determine whether vendors are suspended or debarred. Cause. The Organization did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect. Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as none of the vendors or subrecipients involved were actually suspended or debarred. Recommendation. We recommend that the Organization review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.
Information on the Federal Program: Assistance Listing Number 47.050—Geosciences, National Science Foundation. Award Number: 224242, 2303562, 2243827, 2246223, 2246225. Compliance Requirements: Procurement Suspension and Debarment Type of Finding: Material Noncompliance and Significant Deficiency. Criteria: Under 2 CFR § 200.214 - Suspension and Debarment, recipients and subrecipients of federal funding must adhere to the nonprocurement debarment and suspension regulations that implement Executive Orders 12549 and 12689, as well as 2 CFR Part 180. These regulations prohibit making federal awards, subawards, and contracts with parties that are debarred, suspended, or otherwise excluded from participation in federal programs. Entities must have a documented policy to ensure compliance with these requirements Condition: For the year ended March 31, 2024, Future Earth did not have a written policy for suspension and debarment. Additionally, no control was in place to ensure compliance with these regulations. Cause: This was the second year Future Earth was awarded Federal funding and was unaware of this requirement. Effect: Without a documented policy for suspension and debarment, the Future Earth risks inadvertently engaging in contracts with suspended or debarred vendors. This can lead to noncompliance with federal regulations and potential financial penalties Questioned Costs: None. Context: In our testing of two procurement transactions totaling $116,404 which were subject to suspension and debarment regulation, out of total transactions subject to procurement of $220,192, it was noted that management did not verify the vendors were not suspended/debarred. Upon further research, the auditor was able to verify that neither vendor was suspended/debarred. Recommendation: We recommend that Future Earth develop a written policy to check all vendors for suspension and debarment on SAM.gov prior to awarding contracts. Views of Responsible Official: Management agrees with this finding. Please see corrective action plan at the end of this report.
Finding: Suspension and Debarment U.S. Department of the Treasury Passed through Missouri Primary Care Association Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Fund Award Year: 2022 Award Number: SLFPR4542 Criteria or Specific Requirement In accordance with 2 CFR 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. "Covered transactions" include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. Part 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Proper verification of vendors was not occurring prior to purchase to determine whether vendors were suspended or debarred. Questioned Costs - None noted. Context: One transaction selected for testing the suspension and debarment verification occurred subsequent to the purchase. Identification of Prior Year Finding: N/A Effect: Federal funds could be paid to entities that are suspended or debarred. Cause: Vendors subject to suspension and debarment requirements are entered into Compilatric, a 3rd party software, to run monthly exclusion checks. Compilatric checks with the OIG, SAM, and GAS, plus about 35 other state and federal databases that host suspended and disbarred lists. The purchase from this vendor was not communicated to the correct department timely and a check was inadvertently missed. Recommendation: We recommend that the Health Center communicate to all departments that purchases using federal funds have suspension and debarment checks completed prior to purchase. View of Responsible Official and Planned Corrective Actions: The Health Center agrees with the finding. See separate report for planned corrective actions.
2024-003 – Procurement, Suspension and Debarment Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment). Program. COVID-19 - Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; Assistance Listing Number 21.027, All Award Numbers Criteria. 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition. There is no procedure in place to determine whether vendors are suspended or debarred. Cause. The Organization did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect. Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as none of the vendors or subrecipients involved were actually suspended or debarred. Recommendation. We recommend that the Organization review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.
2024-003 – Procurement, Suspension and Debarment Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment). Program. COVID-19 - Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; Assistance Listing Number 21.027, All Award Numbers Criteria. 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition. There is no procedure in place to determine whether vendors are suspended or debarred. Cause. The Organization did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect. Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as none of the vendors or subrecipients involved were actually suspended or debarred. Recommendation. We recommend that the Organization review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.
2024-003 – Procurement, Suspension and Debarment Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment). Program. COVID-19 - Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; Assistance Listing Number 21.027, All Award Numbers Criteria. 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition. There is no procedure in place to determine whether vendors are suspended or debarred. Cause. The Organization did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect. Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as none of the vendors or subrecipients involved were actually suspended or debarred. Recommendation. We recommend that the Organization review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.
2024-003 – Procurement, Suspension and Debarment Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment). Program. COVID-19 - Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; Assistance Listing Number 21.027, All Award Numbers Criteria. 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition. There is no procedure in place to determine whether vendors are suspended or debarred. Cause. The Organization did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect. Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as none of the vendors or subrecipients involved were actually suspended or debarred. Recommendation. We recommend that the Organization review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.
2024-003 – Procurement, Suspension and Debarment Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment). Program. COVID-19 - Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; Assistance Listing Number 21.027, All Award Numbers Criteria. 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition. There is no procedure in place to determine whether vendors are suspended or debarred. Cause. The Organization did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect. Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as none of the vendors or subrecipients involved were actually suspended or debarred. Recommendation. We recommend that the Organization review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.
Information on the Federal Program: Assistance Listing Number 47.050—Geosciences, National Science Foundation. Award Number: 224242, 2303562, 2243827, 2246223, 2246225. Compliance Requirements: Procurement Suspension and Debarment Type of Finding: Material Noncompliance and Significant Deficiency. Criteria: Under 2 CFR § 200.214 - Suspension and Debarment, recipients and subrecipients of federal funding must adhere to the nonprocurement debarment and suspension regulations that implement Executive Orders 12549 and 12689, as well as 2 CFR Part 180. These regulations prohibit making federal awards, subawards, and contracts with parties that are debarred, suspended, or otherwise excluded from participation in federal programs. Entities must have a documented policy to ensure compliance with these requirements Condition: For the year ended March 31, 2024, Future Earth did not have a written policy for suspension and debarment. Additionally, no control was in place to ensure compliance with these regulations. Cause: This was the second year Future Earth was awarded Federal funding and was unaware of this requirement. Effect: Without a documented policy for suspension and debarment, the Future Earth risks inadvertently engaging in contracts with suspended or debarred vendors. This can lead to noncompliance with federal regulations and potential financial penalties Questioned Costs: None. Context: In our testing of two procurement transactions totaling $116,404 which were subject to suspension and debarment regulation, out of total transactions subject to procurement of $220,192, it was noted that management did not verify the vendors were not suspended/debarred. Upon further research, the auditor was able to verify that neither vendor was suspended/debarred. Recommendation: We recommend that Future Earth develop a written policy to check all vendors for suspension and debarment on SAM.gov prior to awarding contracts. Views of Responsible Official: Management agrees with this finding. Please see corrective action plan at the end of this report.
Procurement, Suspension and Debarment Identification of the federal program: Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of Defense Federal Cluster: Research and Development (R&D) Pass-Through Entity: The University of Texas Health (93.853, NS119834) Assistance Listing Nos.: 12.420, 93.310, 93.353, 93.393, and 93.853 Award Numbers: W81XWH-15-1-0292 (12.420), OD23121 (93.310), CA246568 (93.353), CA259201 (93.393), NS119834 (93.853), NS122096 (93.853) Award Periods: Various Criteria or specific requirement (including statutory, regulatory or other citation): 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).” Section 200.320(a)(2)(i) of the Uniform Guidance states the following regarding small purchases: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.” Section 200.320(b) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section.” Section 200.214 of the Uniform Guidance states “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 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 Clinic procurement justification form for procurements more than $25,000 requires completion of the rationale for the procurement and a search of the federal government’s exclusion list to be performed and documented at the time of the procurement. On a monthly basis, Supply Chain Management performs a review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures. Condition: Internal Control For five (56%) of nine procurement transactions tested for operating effectiveness of internal controls, the procurement justification form used by the Clinic to document the history of the procurement and compliance with Uniform Guidance CFR 200.303, was not completed until after the purchase order was created and/or invoice received from the vendor. In addition, for these same five procurement transactions, the Clinic did not timely document its suspension and debarment check at the time of procurement as required by its procurement justification form. In addition, for four (44%) of nine procurement transactions tested for operating effectiveness of internal controls (two of which relate to the five cited above), the procurement justification form used by the Clinic to document the procurement transaction’s compliance with policies, procedures and the Uniform Guidance was outdated. Furthermore, the monthly review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures was not operating effectively. Compliance For one (9%) of 11 procurement transactions tested for compliance, the procurement was an add-on purchase related to a larger procurement of the same product under a prior purchase order. The prior procurement was above the simplified acquisition threshold and the Clinic’s competitive bid threshold. The Clinic did not complete a procurement justification form for the add-on purchase (which was a small purchase), and the original procurement did not have adequate support to evidence that it had been competitively bid. As such, adequate documentation did not exist for the procurement in accordance with Uniform Guidance Section 230.320(a)(2)(i) and(b). In addition, for five procurement transactions, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Cause: While management has internal controls in place to review procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures and Uniform Guidance CFR 200.320, the review of the procurement justification form is not robust enough to identify errors and there is not a process in place to ensure the form is completed prior to the purchase. Effect or potential effect: The Clinic’s internal controls over procurement were not properly followed during the fiscal year. In addition, the Clinic did not follow the Uniform Guidance requirements related to small purchases and noncompetitive procurements. Questioned costs: $53,482, determined as the amount of the procurement expenditures included in the schedule of expenditures of federal awards for the year ended December 31, 2023, for the one procurement transaction that had inadequate support for compliance with CFR 200.320 at the time of procurement, as follows: • Assistance Listing No. 93.310, OD023121 – $53,482 Context: Internal Control We sampled nine federal procurements over $25,000 to test operating effectiveness of internal controls, totaling $962,393, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For seven of the 11 federal procurements tested totaling $770,093, procurement controls were not operating effectively. • For five of 11 procurement transactions tested totaling $529,273, the independent suspension and debarment check to be performed at the time of procurement was not performed until approximately two to eight months later. Compliance We sampled 11 federal procurements over $25,000 to test compliance, totaling $1,736,844, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For one of 11 federal procurements tested totaling $53,482, documentation retained was not adequate to support that the procurement transaction was executed in accordance with the Uniform Guidance Sections 200.320(a)(2)(i) and (b). • For five of 11 procurement transactions tested totaling $529,273, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Procurement-related expenditures are approximately 9% of total Federal expenditures for the R&D Cluster of $445,961,340 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: The finding is not a repeat of the finding of the prior year. Recommendation: The Clinic should ensure that all R&D awards that require procurement of goods and services follow established policies, procedures, and internal controls to comply with the Uniform Guidance procurement standards and that the procurement justification form is reviewed prior to entering into the purchase transaction. The Clinic should ensure that independent checks for suspension and debarment should be timely completed at the time of procurement in accordance with the Clinic documented policies, procedures, and internal controls. Views of responsible officials: Management will reinforce education and training to the research community and procurement teams regarding the procurement requirements, Justification of Source Selection Checklist/Form, and timely completion of the required documentation. The Clinic utilizes a third party, Visual Compliance, to execute daily supplier sanction and debarment checks for all Mayo Clinic vendors. All third party suspension and debarment match alerts are reviewed and adjudicated as needed. Going forward, the Clinic will supplement this daily review by periodically validating a sample of vendors who are not flagged with an alert by Visual Compliance.
Procurement, Suspension and Debarment Identification of the federal program: Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of Defense Federal Cluster: Research and Development (R&D) Pass-Through Entity: The University of Texas Health (93.853, NS119834) Assistance Listing Nos.: 12.420, 93.310, 93.353, 93.393, and 93.853 Award Numbers: W81XWH-15-1-0292 (12.420), OD23121 (93.310), CA246568 (93.353), CA259201 (93.393), NS119834 (93.853), NS122096 (93.853) Award Periods: Various Criteria or specific requirement (including statutory, regulatory or other citation): 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).” Section 200.320(a)(2)(i) of the Uniform Guidance states the following regarding small purchases: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.” Section 200.320(b) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section.” Section 200.214 of the Uniform Guidance states “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 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 Clinic procurement justification form for procurements more than $25,000 requires completion of the rationale for the procurement and a search of the federal government’s exclusion list to be performed and documented at the time of the procurement. On a monthly basis, Supply Chain Management performs a review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures. Condition: Internal Control For five (56%) of nine procurement transactions tested for operating effectiveness of internal controls, the procurement justification form used by the Clinic to document the history of the procurement and compliance with Uniform Guidance CFR 200.303, was not completed until after the purchase order was created and/or invoice received from the vendor. In addition, for these same five procurement transactions, the Clinic did not timely document its suspension and debarment check at the time of procurement as required by its procurement justification form. In addition, for four (44%) of nine procurement transactions tested for operating effectiveness of internal controls (two of which relate to the five cited above), the procurement justification form used by the Clinic to document the procurement transaction’s compliance with policies, procedures and the Uniform Guidance was outdated. Furthermore, the monthly review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures was not operating effectively. Compliance For one (9%) of 11 procurement transactions tested for compliance, the procurement was an add-on purchase related to a larger procurement of the same product under a prior purchase order. The prior procurement was above the simplified acquisition threshold and the Clinic’s competitive bid threshold. The Clinic did not complete a procurement justification form for the add-on purchase (which was a small purchase), and the original procurement did not have adequate support to evidence that it had been competitively bid. As such, adequate documentation did not exist for the procurement in accordance with Uniform Guidance Section 230.320(a)(2)(i) and(b). In addition, for five procurement transactions, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Cause: While management has internal controls in place to review procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures and Uniform Guidance CFR 200.320, the review of the procurement justification form is not robust enough to identify errors and there is not a process in place to ensure the form is completed prior to the purchase. Effect or potential effect: The Clinic’s internal controls over procurement were not properly followed during the fiscal year. In addition, the Clinic did not follow the Uniform Guidance requirements related to small purchases and noncompetitive procurements. Questioned costs: $53,482, determined as the amount of the procurement expenditures included in the schedule of expenditures of federal awards for the year ended December 31, 2023, for the one procurement transaction that had inadequate support for compliance with CFR 200.320 at the time of procurement, as follows: • Assistance Listing No. 93.310, OD023121 – $53,482 Context: Internal Control We sampled nine federal procurements over $25,000 to test operating effectiveness of internal controls, totaling $962,393, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For seven of the 11 federal procurements tested totaling $770,093, procurement controls were not operating effectively. • For five of 11 procurement transactions tested totaling $529,273, the independent suspension and debarment check to be performed at the time of procurement was not performed until approximately two to eight months later. Compliance We sampled 11 federal procurements over $25,000 to test compliance, totaling $1,736,844, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For one of 11 federal procurements tested totaling $53,482, documentation retained was not adequate to support that the procurement transaction was executed in accordance with the Uniform Guidance Sections 200.320(a)(2)(i) and (b). • For five of 11 procurement transactions tested totaling $529,273, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Procurement-related expenditures are approximately 9% of total Federal expenditures for the R&D Cluster of $445,961,340 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: The finding is not a repeat of the finding of the prior year. Recommendation: The Clinic should ensure that all R&D awards that require procurement of goods and services follow established policies, procedures, and internal controls to comply with the Uniform Guidance procurement standards and that the procurement justification form is reviewed prior to entering into the purchase transaction. The Clinic should ensure that independent checks for suspension and debarment should be timely completed at the time of procurement in accordance with the Clinic documented policies, procedures, and internal controls. Views of responsible officials: Management will reinforce education and training to the research community and procurement teams regarding the procurement requirements, Justification of Source Selection Checklist/Form, and timely completion of the required documentation. The Clinic utilizes a third party, Visual Compliance, to execute daily supplier sanction and debarment checks for all Mayo Clinic vendors. All third party suspension and debarment match alerts are reviewed and adjudicated as needed. Going forward, the Clinic will supplement this daily review by periodically validating a sample of vendors who are not flagged with an alert by Visual Compliance.
Procurement, Suspension and Debarment Identification of the federal program: Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of Defense Federal Cluster: Research and Development (R&D) Pass-Through Entity: The University of Texas Health (93.853, NS119834) Assistance Listing Nos.: 12.420, 93.310, 93.353, 93.393, and 93.853 Award Numbers: W81XWH-15-1-0292 (12.420), OD23121 (93.310), CA246568 (93.353), CA259201 (93.393), NS119834 (93.853), NS122096 (93.853) Award Periods: Various Criteria or specific requirement (including statutory, regulatory or other citation): 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).” Section 200.320(a)(2)(i) of the Uniform Guidance states the following regarding small purchases: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.” Section 200.320(b) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section.” Section 200.214 of the Uniform Guidance states “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 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 Clinic procurement justification form for procurements more than $25,000 requires completion of the rationale for the procurement and a search of the federal government’s exclusion list to be performed and documented at the time of the procurement. On a monthly basis, Supply Chain Management performs a review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures. Condition: Internal Control For five (56%) of nine procurement transactions tested for operating effectiveness of internal controls, the procurement justification form used by the Clinic to document the history of the procurement and compliance with Uniform Guidance CFR 200.303, was not completed until after the purchase order was created and/or invoice received from the vendor. In addition, for these same five procurement transactions, the Clinic did not timely document its suspension and debarment check at the time of procurement as required by its procurement justification form. In addition, for four (44%) of nine procurement transactions tested for operating effectiveness of internal controls (two of which relate to the five cited above), the procurement justification form used by the Clinic to document the procurement transaction’s compliance with policies, procedures and the Uniform Guidance was outdated. Furthermore, the monthly review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures was not operating effectively. Compliance For one (9%) of 11 procurement transactions tested for compliance, the procurement was an add-on purchase related to a larger procurement of the same product under a prior purchase order. The prior procurement was above the simplified acquisition threshold and the Clinic’s competitive bid threshold. The Clinic did not complete a procurement justification form for the add-on purchase (which was a small purchase), and the original procurement did not have adequate support to evidence that it had been competitively bid. As such, adequate documentation did not exist for the procurement in accordance with Uniform Guidance Section 230.320(a)(2)(i) and(b). In addition, for five procurement transactions, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Cause: While management has internal controls in place to review procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures and Uniform Guidance CFR 200.320, the review of the procurement justification form is not robust enough to identify errors and there is not a process in place to ensure the form is completed prior to the purchase. Effect or potential effect: The Clinic’s internal controls over procurement were not properly followed during the fiscal year. In addition, the Clinic did not follow the Uniform Guidance requirements related to small purchases and noncompetitive procurements. Questioned costs: $53,482, determined as the amount of the procurement expenditures included in the schedule of expenditures of federal awards for the year ended December 31, 2023, for the one procurement transaction that had inadequate support for compliance with CFR 200.320 at the time of procurement, as follows: • Assistance Listing No. 93.310, OD023121 – $53,482 Context: Internal Control We sampled nine federal procurements over $25,000 to test operating effectiveness of internal controls, totaling $962,393, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For seven of the 11 federal procurements tested totaling $770,093, procurement controls were not operating effectively. • For five of 11 procurement transactions tested totaling $529,273, the independent suspension and debarment check to be performed at the time of procurement was not performed until approximately two to eight months later. Compliance We sampled 11 federal procurements over $25,000 to test compliance, totaling $1,736,844, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For one of 11 federal procurements tested totaling $53,482, documentation retained was not adequate to support that the procurement transaction was executed in accordance with the Uniform Guidance Sections 200.320(a)(2)(i) and (b). • For five of 11 procurement transactions tested totaling $529,273, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Procurement-related expenditures are approximately 9% of total Federal expenditures for the R&D Cluster of $445,961,340 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: The finding is not a repeat of the finding of the prior year. Recommendation: The Clinic should ensure that all R&D awards that require procurement of goods and services follow established policies, procedures, and internal controls to comply with the Uniform Guidance procurement standards and that the procurement justification form is reviewed prior to entering into the purchase transaction. The Clinic should ensure that independent checks for suspension and debarment should be timely completed at the time of procurement in accordance with the Clinic documented policies, procedures, and internal controls. Views of responsible officials: Management will reinforce education and training to the research community and procurement teams regarding the procurement requirements, Justification of Source Selection Checklist/Form, and timely completion of the required documentation. The Clinic utilizes a third party, Visual Compliance, to execute daily supplier sanction and debarment checks for all Mayo Clinic vendors. All third party suspension and debarment match alerts are reviewed and adjudicated as needed. Going forward, the Clinic will supplement this daily review by periodically validating a sample of vendors who are not flagged with an alert by Visual Compliance.
Procurement, Suspension and Debarment Identification of the federal program: Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of Defense Federal Cluster: Research and Development (R&D) Pass-Through Entity: The University of Texas Health (93.853, NS119834) Assistance Listing Nos.: 12.420, 93.310, 93.353, 93.393, and 93.853 Award Numbers: W81XWH-15-1-0292 (12.420), OD23121 (93.310), CA246568 (93.353), CA259201 (93.393), NS119834 (93.853), NS122096 (93.853) Award Periods: Various Criteria or specific requirement (including statutory, regulatory or other citation): 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).” Section 200.320(a)(2)(i) of the Uniform Guidance states the following regarding small purchases: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.” Section 200.320(b) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section.” Section 200.214 of the Uniform Guidance states “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 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 Clinic procurement justification form for procurements more than $25,000 requires completion of the rationale for the procurement and a search of the federal government’s exclusion list to be performed and documented at the time of the procurement. On a monthly basis, Supply Chain Management performs a review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures. Condition: Internal Control For five (56%) of nine procurement transactions tested for operating effectiveness of internal controls, the procurement justification form used by the Clinic to document the history of the procurement and compliance with Uniform Guidance CFR 200.303, was not completed until after the purchase order was created and/or invoice received from the vendor. In addition, for these same five procurement transactions, the Clinic did not timely document its suspension and debarment check at the time of procurement as required by its procurement justification form. In addition, for four (44%) of nine procurement transactions tested for operating effectiveness of internal controls (two of which relate to the five cited above), the procurement justification form used by the Clinic to document the procurement transaction’s compliance with policies, procedures and the Uniform Guidance was outdated. Furthermore, the monthly review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures was not operating effectively. Compliance For one (9%) of 11 procurement transactions tested for compliance, the procurement was an add-on purchase related to a larger procurement of the same product under a prior purchase order. The prior procurement was above the simplified acquisition threshold and the Clinic’s competitive bid threshold. The Clinic did not complete a procurement justification form for the add-on purchase (which was a small purchase), and the original procurement did not have adequate support to evidence that it had been competitively bid. As such, adequate documentation did not exist for the procurement in accordance with Uniform Guidance Section 230.320(a)(2)(i) and(b). In addition, for five procurement transactions, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Cause: While management has internal controls in place to review procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures and Uniform Guidance CFR 200.320, the review of the procurement justification form is not robust enough to identify errors and there is not a process in place to ensure the form is completed prior to the purchase. Effect or potential effect: The Clinic’s internal controls over procurement were not properly followed during the fiscal year. In addition, the Clinic did not follow the Uniform Guidance requirements related to small purchases and noncompetitive procurements. Questioned costs: $53,482, determined as the amount of the procurement expenditures included in the schedule of expenditures of federal awards for the year ended December 31, 2023, for the one procurement transaction that had inadequate support for compliance with CFR 200.320 at the time of procurement, as follows: • Assistance Listing No. 93.310, OD023121 – $53,482 Context: Internal Control We sampled nine federal procurements over $25,000 to test operating effectiveness of internal controls, totaling $962,393, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For seven of the 11 federal procurements tested totaling $770,093, procurement controls were not operating effectively. • For five of 11 procurement transactions tested totaling $529,273, the independent suspension and debarment check to be performed at the time of procurement was not performed until approximately two to eight months later. Compliance We sampled 11 federal procurements over $25,000 to test compliance, totaling $1,736,844, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For one of 11 federal procurements tested totaling $53,482, documentation retained was not adequate to support that the procurement transaction was executed in accordance with the Uniform Guidance Sections 200.320(a)(2)(i) and (b). • For five of 11 procurement transactions tested totaling $529,273, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Procurement-related expenditures are approximately 9% of total Federal expenditures for the R&D Cluster of $445,961,340 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: The finding is not a repeat of the finding of the prior year. Recommendation: The Clinic should ensure that all R&D awards that require procurement of goods and services follow established policies, procedures, and internal controls to comply with the Uniform Guidance procurement standards and that the procurement justification form is reviewed prior to entering into the purchase transaction. The Clinic should ensure that independent checks for suspension and debarment should be timely completed at the time of procurement in accordance with the Clinic documented policies, procedures, and internal controls. Views of responsible officials: Management will reinforce education and training to the research community and procurement teams regarding the procurement requirements, Justification of Source Selection Checklist/Form, and timely completion of the required documentation. The Clinic utilizes a third party, Visual Compliance, to execute daily supplier sanction and debarment checks for all Mayo Clinic vendors. All third party suspension and debarment match alerts are reviewed and adjudicated as needed. Going forward, the Clinic will supplement this daily review by periodically validating a sample of vendors who are not flagged with an alert by Visual Compliance.