Assistance Listing Number: 93.193 Name of Federal Program: COVID-19 Urban Indian Health Services Name of Federal Agency: Department of Health and Human Services Award Period: January 1, 2024 – December 31, 2024 Criteria or Specific Requirement: 2 CFR section 200.318(i) requires a non-federal entity to maintain sufficient records to detail the history of procurement including, but not limited to, the: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: The organization did not maintain adequate records to fully detail the history of procurement transactions funded with federal awards. Specifically, documentation was missing or incomplete regarding the rationale for the method of procurement, basis for contractor selection or rejection, price or cost analysis, and contract terms. Cause: The organization did not establish or enforce adequate recordkeeping procedures for procurement transactions. Supporting documentation for procurement files was not retained. Procurement policies and procedures have not been designed and implemented that adhere to Uniform Guidance requirements. Effect or Potential Effect: Without sufficient records, the organization cannot demonstrate compliance with Uniform Guidance procurement requirements. This increases the risk of unallowable or unreasonable costs being charged to federal awards and may result in questioned costs or funding agency disallowances. Questioned Costs: $194,797 Context: All vendors meeting the procurement policy threshold were tested. Repeat Finding: No Recommendation: Management should implement procedures to ensure that complete procurement documentation is maintained in accordance with 2 CFR §200.318(i). This should include standardized procurement checklists, training for staff involved in purchasing, and periodic internal reviews to confirm that procurement files contain all required documentation. Views of Responsible Officials: Management agrees with the finding and will implement procurement procedures.
2024-005 – WRITTEN PROCUREMENT POLICIES AND PROCEDURES DO NOT CONFORM TO THE UNIFORM GUIDANCE PROCUREMENT STANDARDS Federal Program: Assistance Listing Number 17.258 and 17.278 – WIOA Adult & Dislocated Worker Grant Cluster. Federal awarding agency: U.S. Department of Labor, Employment and Training Administration. Pass-through entity: Kentucky Education and Labor Cabinet. Type of Finding: Significant deficiency in internal control over compliance; Procurement, Suspension and Debarment. Repeat finding – reported in the prior year as finding 2023-006. Criteria: Uniform Guidance at 2 CFR 200.318 requires non-Federal entities to maintain and use documented procurement procedures that are consistent with applicable state and local laws and regulations and conform to Federal procurement standards. Written policies should address matters including conflicts of interest, methods of procurement, contractor oversight, and full and open competition. Condition: During our review of procurement policies and procedures, we noted that the Institute had not adopted written procurement policies and procedures that conform to the procurement requirements of Uniform Guidance. Specifically, the Institute's policies did not adequately address the Federal procurement standards contained in 2 CFR Part 200. Cause: The Institute has not completed the revision of its written procurement policies and procedures to conform to the Uniform Guidance, and personnel responsible for grant administration have not been trained on the Uniform Guidance procurement standards. Effect: Without conforming written procurement policies, the Institute may not consistently apply Federal procurement requirements when expending Federal funds. This increases the risk of noncompliance and the use of procurement methods that do not meet Federal requirements. Questioned Costs: None Recommendation: We recommend that management adopt and implement written procurement policies and procedures that comply with 2 CFR 200.317 through 200.327. The policies should address procurement methods, conflicts of interest, contractor selection, suspension and debarment, required cost or price analyses, contractor oversight, full and open competition, and documentation of procurement decisions. Management's Views and Response: The Institute will adopt written procurement policies and procedures that conform to the Uniform Guidance procurement standards, present them to the Board of Directors for approval, and train the personnel responsible for procurement on their use.
2024-003 – Procurement and Suspension and Debarment Finding Type: Material Noncompliance; Material Weakness in Internal Control over Compliance Program: Rural Health Outreach and Rural Network Development Program (AL# 93.912); U.S. Department of Health and Human Services; Direct award; all grant numbers. Criteria: Non-federal entities must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: The Organization's procurement policies were not complete and the Organization did not follow the federal procurement standards which provides specific guidance including process and documentation requirements necessary to be in compliance as required by the 2 CFR sections 200.318 through 200.326. Cause: The Organization’s procurement policies do not include the federal procurement requirements noted at 2 CFR section 200.318 through 200.326. Additionally, the Organization did not maintain the required procurement documentation, provide for full and open competition, or provide support for limitation of such competition. Effect: Future procurement arrangements may not meet the federal guidelines necessary for projects funded by federal sources. The Organization may have to pay back funds received for a project where federal funds were used for the procurement of products or services, but the required federal process was not met. Questioned Costs: $98,500. Recommendation: The Organization should update their procurement policy to include all requirements as noted in 2 CFR sections 200.318-200.326 and ensure that all future agreements follow the required processes. View of Responsible Officials: Management agrees with the finding. On June 2, 2025, the Board approved revised Policy F2.01 v.01, Procurement for Products or Services. Effective September 1, 2026, management adopted Procedure SOP F2.01 v.01, Procurement Under Federal Awards, which supplements Policy F2.01 and incorporates the procurement standards at 2 CFR 200.317 through 200.327 and the suspension and debarment requirements at 2 CFR Part 180. See the Corrective Action Plan. Repeat Finding - 2023-001
AL 66.458 Clean Water State Revolving Funds – Procurement, Suspension and Debarment – Significant Deficiency Criteria Recipients and subrecipients other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR 200.318 through 200.327. Condition During internal control inquire, we noted the City did not follow federal procurement requirements. The City also entered into a covered transaction without checking the vendor to ensure they did not have an active suspended or debarred exclusion from receiving federal funds. Cause Management oversight. Effect The City is not in compliance with federal procurement, suspension and debarment requirements. Questioned Costs None Recommendation We recommend that the City follow their procurement policy and the requirements of 2 CFR 200.318 and document the fulfillment of this requirement. Views of Responsible Officials and Planned Corrective Actions Project management staff has been made aware of this requirement and will document vendor checks for federal projects going forward. Repeat Finding: This is a repeat finding of prior year finding 2023-004.
Finding 2024-005 Finding Type: Noncompliance and significant deficiency in internal control Federal Department: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention Identification of the Federal Program: Assistance Listing Number 93.988 – Cooperative Agreements for Diabetes Control Programs Award Number: NU58DP007394 Compliance Requirement(s): Procurement and Suspension and Debarment Criteria: Per 2 CFR Part 200.318(a) (Documented Procurement Procedures), the recipient or subrecipient 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 2 CFR Part 200.317 through 2 CFR Part 200.327. Non-federal entities are prohibited from contracting with parties that are suspended or debarred. Covered transactions include contracts or goods and services that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR 180.220. Per 2 CFR Part 180.300, when a non-federal entity enters into a covered transaction with another entity at the next lower tier, the non-federal entity must verify that the entity with whom it intends to do business is not excluded or disqualified by: 1) Checking SAM.gov exclusions; or 2) Collecting a certification from that entity; or 3) Adding a clause or condition to the covered transaction with that entity. Per 2 CFR Part 200.303(a), the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align 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 COSO. Condition: The Imperative did not have a written procurement policy in place for 2024 as required by 2 CFR Part 200.318(a). The Imperative provided AL #93.988 funds equal to or exceeding $25,000 to seven subgrantees and contractors during 2024. The Imperative failed to perform and document a verification check on SAM.gov for one contractor totaling $25,000. Additionally, the corresponding contract did not contain a suspension and debarment certification clause, and the Imperative did not obtain a signed vendor-specific suspension and debarment certification. Cause: Due to oversight, the Imperative did not establish a written procurement policy or maintain adequate internal controls and documentation over the procurement and suspension and debarment process for the AL #93.988 program for 2024. Effect: The potential exists that the Imperative could have provided federal funds to suspended or debarred parties, resulting in the Imperative being in noncompliance with federal procurement regulations. Questioned Costs: None. Repeat Finding: Not applicable. Recommendation: We recommend that the Imperative implement procedures to establish a written procurement policy, establish a process of vetting vendors and maintain adequate internal controls over the procurement and suspension and debarment process. View of Responsible Officials: See management’s corrective action plan.
Finding: 2024-001 Program Title: Congressionally Funded Community Projects Assistance Listing: 84.215K Contract Grant Number: S215K230172 Federal Award Years: July 1, 2023 to May 31, 2025 Federal Agency: U.S. Department of Education Compliance Requirement: Procurement Other Compliance Requirement Affected: Allowable Costs Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Uniform Guidance 2 CFR sections 200.318 through 200.326 requires Non-Federal Entities to follow documented procurement procedures that ensure full and open competition and include, among other requirements: - Use of an appropriate procurement method based on the dollar value of the acquisition. As outlined in 2 CFR section 200.320, one of the following procurement methods must be used: the sealed bid method, the competitive proposals method, or the noncompetitive proposals method. - Avoidance of conflicts of interest, including prohibitions on employees, officers, or agents participating in the selection, award, or administration of a contract in which they have a real or apparent financial interest (2 CFR section 200.318(c)(1); and - Consolidation of procurements, where appropriate, to ensure economical purchasing and compliance with applicable procurement thresholds and competition requirements. Condition: During the current year’s audit, the Organization did not consistently comply with federal procurement requirements for expenditures charged to the program. Specifically: 1. Use of Inappropriate Procurement Methods - For acquisitions exceeding the simplified acquisition threshold, the Organization did not utilize an appropriate procurement method. Despite having a written procurement policy, formal procurement procedures were not followed, and documentation supporting competitive selection was not maintained. This condition represents a repeat of prior year finding 2023-001. 2. Conflict of Interest - A board member participated in the administration of the federal award while simultaneously being paid by the Organization for services related to the award, which created a financial interest. The Organization did not document safeguards or recusals to mitigate this conflict, resulting in a breach of federal conflictof-interest requirements. 3. Failure to Reasonably Consolidate Procurements - The Organization entered contracts that included duplicative or substantially similar items, which were not reasonably consolidated. As a result, procurements were fragmented in a manner that did not promote economical purchasing or compliance with procurement thresholds. While the Organization has limited staffing capacity and relies on a fiscal agent model, federal procurement requirements apply regardless of organizational size or structure. Because procurement was not conducted in accordance with federal requirements, the costs incurred under these contracts are considered to be unallowable, even though the services may have been received. Cause: The Organization lacked sufficient internal controls over procurement due to its governance-based operating structure and reliance on a fiscal agent to perform administrative functions. Procurement responsibilities were not clearly segregated from oversight responsibilities, and controls were not designed or implemented to address conflicts of interest involving board members. Additionally, procurement planning was informal and not subject to documented reviews to ensure compliance with federal procurement standards. Effect: As a result of these conditions, costs totaling $302,695 charged to the federal award do not meet federal allowability requirements because the underlying procurement did not comply with Uniform Guidance. These are considered questioned costs. This is considered material to the Congressionally Funded Community Projects. These deficiencies increase the risk that procurements were not conducted with full and open competition and that decisions were influenced by conflicts of interest. Additionally, failure to consolidate procurements may have resulted in inefficient use of federal funds. Repeat Finding: Yes, however, the current year finding has been modified to reflect additional instances of noncompliance, including conflicts of interest and procurement fragmentation, which were not identified in the prior year. Recommendation: We recommend that the Organization do the following: (1) Ensure acquisitions exceeding the simplified acquisition threshold are procured using appropriate formal procurement methods that are adequately documented, (2) Enforce conflict-of-interest policies requiring disclosure and recusal of board members and officers with financial interests in federal awards, and (3) Implement procurement planning procedures to reasonably consolidate purchases to avoid duplicative or fragmented procedures. Views of Responsible Officials: Management agrees with the finding and has developed a corrective action plan to address the issues noted.
U.S. DEPARTMENT OF TRANSPORTATION Highway Planning and Construction – 20.205 2024-005 Procurement and Suspension and Debarment Policies Condition: The County does not have written policies and procedures in place for the procurement of contractors per 2 CFR Part 200.318 – 200.327, 23 CFR Part 172, and 23 CFR Sections 635.104 & 635.114. The County does not have written standards of conduct that covers conflicts of interest and governs the performance of its employees engaged in the selection and administration of contracts per 2 CFR Section 200.318(c) and 48 CFR Sections 52.203-13 and 52.303-16. Criteria: Policies and procedures for the procurement of service providers should be documented and maintained to ensure the proper advertisement and selection of contractors and consultants. Policies should give all contractors and consultants (in-State and out-of-State) a fair opportunity to be considered for awards. Policies in place should also document standards to prevent conflicts of interest during the selection process. Cause: The County was not aware they were required to have written procurement policies and procedures. Effect: In the absence of procurement policies and procedures, conflicts of interest may exist, and bids may be inadequately obtained and awarded. Context: In a sample of three out of three highway planning and construction contracts the County followed procurement standards 2 CFR Part 200.318 – 200.327, 23 CFR Part 172, and 23 CFR Sections 635.104 & 635.114 when bidding and selecting contracts. Due to the estimated fee range, geographic location of the projects, and the Quality Based Selection Ranking for engineer services, the County does not believe the selection process would have changed if written policies and procedures for the procurement of contractors was in place. Therefore, there are no questioned costs. Recommendation: The County Board should draft and approve policies and procedures for the procurement of contractors per the Compliance Supplement, Code of Federal Regulations, United States Codes, and Federal Acquisition Regulations to ensure the proper advertisement and selection of contractors and consultants, and to prevent conflicts of interest during the selection of contractors and consultants. Views of Responsible Officials and Planned Corrective Actions: Management will draft and approve the recommended procurement policies and procedures and disseminate the information to department heads and County employees during the fall of 2025.
U.S. DEPARTMENT OF TRANSPORTATION Highway Planning and Construction – 20.205 2024-005 Procurement and Suspension and Debarment Policies Condition: The County does not have written policies and procedures in place for the procurement of contractors per 2 CFR Part 200.318 – 200.327, 23 CFR Part 172, and 23 CFR Sections 635.104 & 635.114. The County does not have written standards of conduct that covers conflicts of interest and governs the performance of its employees engaged in the selection and administration of contracts per 2 CFR Section 200.318(c) and 48 CFR Sections 52.203-13 and 52.303-16. Criteria: Policies and procedures for the procurement of service providers should be documented and maintained to ensure the proper advertisement and selection of contractors and consultants. Policies should give all contractors and consultants (in-State and out-of-State) a fair opportunity to be considered for awards. Policies in place should also document standards to prevent conflicts of interest during the selection process. Cause: The County was not aware they were required to have written procurement policies and procedures. Effect: In the absence of procurement policies and procedures, conflicts of interest may exist, and bids may be inadequately obtained and awarded. Context: In a sample of three out of three highway planning and construction contracts the County followed procurement standards 2 CFR Part 200.318 – 200.327, 23 CFR Part 172, and 23 CFR Sections 635.104 & 635.114 when bidding and selecting contracts. Due to the estimated fee range, geographic location of the projects, and the Quality Based Selection Ranking for engineer services, the County does not believe the selection process would have changed if written policies and procedures for the procurement of contractors was in place. Therefore, there are no questioned costs. Recommendation: The County Board should draft and approve policies and procedures for the procurement of contractors per the Compliance Supplement, Code of Federal Regulations, United States Codes, and Federal Acquisition Regulations to ensure the proper advertisement and selection of contractors and consultants, and to prevent conflicts of interest during the selection of contractors and consultants. Views of Responsible Officials and Planned Corrective Actions: Management will draft and approve the recommended procurement policies and procedures and disseminate the information to department heads and County employees during the fall of 2025.
U.S. DEPARTMENT OF TRANSPORTATION Highway Planning and Construction – 20.205 2024-005 Procurement and Suspension and Debarment Policies Condition: The County does not have written policies and procedures in place for the procurement of contractors per 2 CFR Part 200.318 – 200.327, 23 CFR Part 172, and 23 CFR Sections 635.104 & 635.114. The County does not have written standards of conduct that covers conflicts of interest and governs the performance of its employees engaged in the selection and administration of contracts per 2 CFR Section 200.318(c) and 48 CFR Sections 52.203-13 and 52.303-16. Criteria: Policies and procedures for the procurement of service providers should be documented and maintained to ensure the proper advertisement and selection of contractors and consultants. Policies should give all contractors and consultants (in-State and out-of-State) a fair opportunity to be considered for awards. Policies in place should also document standards to prevent conflicts of interest during the selection process. Cause: The County was not aware they were required to have written procurement policies and procedures. Effect: In the absence of procurement policies and procedures, conflicts of interest may exist, and bids may be inadequately obtained and awarded. Context: In a sample of three out of three highway planning and construction contracts the County followed procurement standards 2 CFR Part 200.318 – 200.327, 23 CFR Part 172, and 23 CFR Sections 635.104 & 635.114 when bidding and selecting contracts. Due to the estimated fee range, geographic location of the projects, and the Quality Based Selection Ranking for engineer services, the County does not believe the selection process would have changed if written policies and procedures for the procurement of contractors was in place. Therefore, there are no questioned costs. Recommendation: The County Board should draft and approve policies and procedures for the procurement of contractors per the Compliance Supplement, Code of Federal Regulations, United States Codes, and Federal Acquisition Regulations to ensure the proper advertisement and selection of contractors and consultants, and to prevent conflicts of interest during the selection of contractors and consultants. Views of Responsible Officials and Planned Corrective Actions: Management will draft and approve the recommended procurement policies and procedures and disseminate the information to department heads and County employees during the fall of 2025.
U.S. DEPARTMENT OF TRANSPORTATION Highway Planning and Construction – 20.205 2024-005 Procurement and Suspension and Debarment Policies Condition: The County does not have written policies and procedures in place for the procurement of contractors per 2 CFR Part 200.318 – 200.327, 23 CFR Part 172, and 23 CFR Sections 635.104 & 635.114. The County does not have written standards of conduct that covers conflicts of interest and governs the performance of its employees engaged in the selection and administration of contracts per 2 CFR Section 200.318(c) and 48 CFR Sections 52.203-13 and 52.303-16. Criteria: Policies and procedures for the procurement of service providers should be documented and maintained to ensure the proper advertisement and selection of contractors and consultants. Policies should give all contractors and consultants (in-State and out-of-State) a fair opportunity to be considered for awards. Policies in place should also document standards to prevent conflicts of interest during the selection process. Cause: The County was not aware they were required to have written procurement policies and procedures. Effect: In the absence of procurement policies and procedures, conflicts of interest may exist, and bids may be inadequately obtained and awarded. Context: In a sample of three out of three highway planning and construction contracts the County followed procurement standards 2 CFR Part 200.318 – 200.327, 23 CFR Part 172, and 23 CFR Sections 635.104 & 635.114 when bidding and selecting contracts. Due to the estimated fee range, geographic location of the projects, and the Quality Based Selection Ranking for engineer services, the County does not believe the selection process would have changed if written policies and procedures for the procurement of contractors was in place. Therefore, there are no questioned costs. Recommendation: The County Board should draft and approve policies and procedures for the procurement of contractors per the Compliance Supplement, Code of Federal Regulations, United States Codes, and Federal Acquisition Regulations to ensure the proper advertisement and selection of contractors and consultants, and to prevent conflicts of interest during the selection of contractors and consultants. Views of Responsible Officials and Planned Corrective Actions: Management will draft and approve the recommended procurement policies and procedures and disseminate the information to department heads and County employees during the fall of 2025.
Criteria: Per 2 CFR §200.318, general procurement standards, the entity must establish policies for procurement of services funded by federal funds. The procurement records and files for purchases in excess of the micro purchase threshold shall include at a minimum the following items: the basis for contractor selection, justification for lack of competition when competitive bids are not obtained, and basis for award cost or price. In addition, award recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contractor registry. To ensure this is done, recipients should utilize the Excluded Parties List System website. Condition/Context: For our sample of one (representing the entire population), there was no documentation of policies and procedures for procurement of services funded by federal funds of $40,000. We determined for this program that rate quotations and rationale for limited competition was not retained for the vendor. It was also determined that there was no documentation retained regarding verification of vendor suspension or debarment. Questioned Costs: None noted. Cause: The entity has written policies including detailed levels of approvals for various vendors and purchases. However, the entity does not have policies and procedures designed for procurements under the Uniform Guidance, and therefore, there is not a formal process established to document the performance of such controls. We note that inadequate controls could result in a reasonable possibility that the entity would not be able to detect and correct noncompliance in a timely manner. Effect: Costs charged to federal awards without appropriate documentation of procurement policies and processes may be subject to disallowance. Repeat Finding: No. Recommendation: We recommend developing written procurement policies in accordance with the Uniform Guidance and implementing a system of review and approval controls to complement the design of processes over the procurement, suspension, and debarment compliance requirements. In addition, we recommend retaining documentation regarding procurement decisions including rate quotations and verification of vendor suspension and debarment checks. Views of Responsible Officials: The Entity agrees with the recommendation. The Entity will develop a formal procurement plan for federal expenditures which will include the specific processes for selecting vendors including documentation retention of the selection process. The policy will also include the process to be followed for verification of vendor suspension or debarment. At the time of the policy’s adoption by the Division, the document will be shared with all corps officers and program administrators throughout the Division. The Divisional Contract Compliance Manager will be responsible for identifying grants to which the policy would apply and to assist with retaining the documentation.
Federal Award Identification Assistance Listing Program Title Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Program Number 21.027 Federal Award ID Number and Year SLFRP1965 Federal Agency U.S. Department of the Treasury Pass-Through Entity Nebraska Department of Health and Human Services Significant Deficiency in Internal Control Over Procurement and Suspension and Debarment Criteria The Health Department’s procurement policy states that documentation of procurements shall be retained for seven years and shall include all federally-required elements of procurement transactions. The Health Department’s procurement policy states that it will require all vendors to self-certify that they are not suspended or debarred. The Health Department is to then check that statement against the Federal System for Award Management. This policy is in compliance with 2 CFR 200.212; 2 CFR 200.318(h); 2 CFR 180.300; 48 CFR 52.209-6. Condition The Health Department did not retain evidence of its procurement of a covered transaction. The Health Department entered into a covered transaction prior to verifying whether the contractor was suspended or debarred. Repeat Finding No. Cause The Health Department did not have a system of controls in place to ensure that their procurement policy was followed. Effect or Potential Effect The Health Department may neglect to procure covered transactions. The Health Department may enter into a covered transaction with a debarred, suspended, or otherwise excluded vendor. Questioned Costs No. Statistical Sample No. Context The Health Department entered into a covered transaction during the year to modernize its restrooms. The Health Department followed its procurement policy and requested proposals from an adequate number of vendors. However, despite repeated attempts to obtain multiple bids, the Health Department was only able to obtain a bid from single vendor. The Health Department proceeded with that bid, as evidenced by the publicly-available board minutes, but failed to follow its procurement policy as it pertains to 1) documentation retention requirements and 2) suspension and debarment. In testing this transaction, the auditor performed a search on the System for Award Management website, noting that the vendor is not on the exclusion list. Recommendation The auditor recommends that the Health Department establish a robust system of controls to ensure it complies with its procurement policy when entering into covered transactions. Views of Responsible Officials See Corrective Action Plan, below.
FINDING 2024-004 PROCUREMENT, SUSPENSION, AND DISBARMENT SIGNIFICANT DEFICIENCY Water and Waste Disposal Systems for Rural Communities COVID-19 State and Local Fiscal Recovery Fund Assistance Listing Number: 10.760 and 21.027 Grant Number: Various Grant Period: Various Criteria According to the Uniform Guidance, non-federal entities must have written procurement policies and procedures that comply with federal regulations. These policies should ensure that procurements are conducted in a manner providing full and open competition, and that conflicts of interest are avoided. Condition During our audit, we noted that the City does not have documented procurement policies and procedures in place as required by the Uniform Guidance (2 CFR Part 200.318). Cause The City has not developed or implemented written procurement policies and procedures. Effect Without documented procurement policies, there is an increased risk of noncompliance with federal procurement standards, potential conflicts of interest, and inefficient use of federal funds. Recommendation We recommend that the City develop and implement written procurement policies and procedures that comply with the Uniform Guidance. These policies should include standards of conduct covering conflicts of interest, procurement methods, and documentation requirements.
FINDING 2024-004 PROCUREMENT, SUSPENSION, AND DISBARMENT SIGNIFICANT DEFICIENCY Water and Waste Disposal Systems for Rural Communities COVID-19 State and Local Fiscal Recovery Fund Assistance Listing Number: 10.760 and 21.027 Grant Number: Various Grant Period: Various Criteria According to the Uniform Guidance, non-federal entities must have written procurement policies and procedures that comply with federal regulations. These policies should ensure that procurements are conducted in a manner providing full and open competition, and that conflicts of interest are avoided. Condition During our audit, we noted that the City does not have documented procurement policies and procedures in place as required by the Uniform Guidance (2 CFR Part 200.318). Cause The City has not developed or implemented written procurement policies and procedures. Effect Without documented procurement policies, there is an increased risk of noncompliance with federal procurement standards, potential conflicts of interest, and inefficient use of federal funds. Recommendation We recommend that the City develop and implement written procurement policies and procedures that comply with the Uniform Guidance. These policies should include standards of conduct covering conflicts of interest, procurement methods, and documentation requirements.
FINDING 2024-004 PROCUREMENT, SUSPENSION, AND DISBARMENT SIGNIFICANT DEFICIENCY Water and Waste Disposal Systems for Rural Communities COVID-19 State and Local Fiscal Recovery Fund Assistance Listing Number: 10.760 and 21.027 Grant Number: Various Grant Period: Various Criteria According to the Uniform Guidance, non-federal entities must have written procurement policies and procedures that comply with federal regulations. These policies should ensure that procurements are conducted in a manner providing full and open competition, and that conflicts of interest are avoided. Condition During our audit, we noted that the City does not have documented procurement policies and procedures in place as required by the Uniform Guidance (2 CFR Part 200.318). Cause The City has not developed or implemented written procurement policies and procedures. Effect Without documented procurement policies, there is an increased risk of noncompliance with federal procurement standards, potential conflicts of interest, and inefficient use of federal funds. Recommendation We recommend that the City develop and implement written procurement policies and procedures that comply with the Uniform Guidance. These policies should include standards of conduct covering conflicts of interest, procurement methods, and documentation requirements.
Criteria: 2 CFR Section 200.318 requires that the non-federal entity must have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a federal award or subaward. The non-federal entity’s documented procurement procedures must conform to the procurement standard identified in §§ 200.317 through 200.327 and must be adhered to. Condition: During testing of the Organization’s controls on compliance over procurement and suspension and debarment, we identified selected vendors the Organization did not have all the needed documentation around the procurement process and the suspension and debarment check. The Organization also must enhance its current procurement policy. Cause: Controls and processes were not effectively designed to ensure there was all proper documentation around the procurement process and the suspension and debarment check. Effect: The Organization was not fully in compliance with the procurement and suspension and debarment check requirements of the Uniform Guidance. Questioned Costs: None. Identification as a Repeat Finding: N/A. Recommendation: We recommend that the Organization review its current documented procurement policy, and its current processes and controls over procurement and suspension and debarment to ensure all required elements are included and the appropriate level of documentation is retained and available.
Finding 2024-003 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #15.657 Criteria or Specific Requirement: § 200.318 (i) General procurement standards, states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore: §200.320 (f) Methods of procurement to be followed, states that procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when certain requirements have been met. Additionally, §200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non- Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; (b) collecting a certification from that person; (c) adding a clause or condition to the covered transaction with that person.Condition: During our audit, we noted contractual relationships under the Federal awards for which evidence of procurement procedures and documentation of SAM Exclusion checks were unavailable for our inspection. It is our understanding that some contracts were procured under noncompetitive (sole source) justification. However, in certain instances we were unable to review documentation detailing the history and rationale of the procurements. Cause: The Organization's processes in place during 2024 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Additionally, the Organization does not have a formal policy in place related to contractor screenings under CFR §200.213. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to. Additionally, the Organization may have inadvertently selected noncompetitive proposals method when the circumstances did not meet the requirements noted in § 200.320 (f) Methods of procurement to be followed, and thereby failing to administer full and open competition as required by the regulations. Finally, the Organization could inadvertently enter into a contractual relationship with an entity that is suspended, debarred or otherwise included on the US Federal sanction list. Questioned Costs: N/A Context: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Yes, continuation of Finding 2023-003 Recommendation: We then recommend that the Organization ensure its policy is distributed and communicated in a formal manner to its employees, and that management properly enforce compliance with its policy. All procurement actions should be clearly documented in writing and maintained in the vendor or contractor files. We also recommend that the Organization enhance its existing policy related to noncompetitive procurement to ensure include the five specific circumstances in which noncompetitive procurement can be used under CFR 200.320. Additionally, we recommend that the Organization enhance its policies to include screening procedures related to 200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.
Finding 2024-003 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #15.657 Criteria or Specific Requirement: § 200.318 (i) General procurement standards, states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore: §200.320 (f) Methods of procurement to be followed, states that procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when certain requirements have been met. Additionally, §200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non- Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; (b) collecting a certification from that person; (c) adding a clause or condition to the covered transaction with that person.Condition: During our audit, we noted contractual relationships under the Federal awards for which evidence of procurement procedures and documentation of SAM Exclusion checks were unavailable for our inspection. It is our understanding that some contracts were procured under noncompetitive (sole source) justification. However, in certain instances we were unable to review documentation detailing the history and rationale of the procurements. Cause: The Organization's processes in place during 2024 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Additionally, the Organization does not have a formal policy in place related to contractor screenings under CFR §200.213. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to. Additionally, the Organization may have inadvertently selected noncompetitive proposals method when the circumstances did not meet the requirements noted in § 200.320 (f) Methods of procurement to be followed, and thereby failing to administer full and open competition as required by the regulations. Finally, the Organization could inadvertently enter into a contractual relationship with an entity that is suspended, debarred or otherwise included on the US Federal sanction list. Questioned Costs: N/A Context: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Yes, continuation of Finding 2023-003 Recommendation: We then recommend that the Organization ensure its policy is distributed and communicated in a formal manner to its employees, and that management properly enforce compliance with its policy. All procurement actions should be clearly documented in writing and maintained in the vendor or contractor files. We also recommend that the Organization enhance its existing policy related to noncompetitive procurement to ensure include the five specific circumstances in which noncompetitive procurement can be used under CFR 200.320. Additionally, we recommend that the Organization enhance its policies to include screening procedures related to 200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.
Finding 2024-003 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #15.657 Criteria or Specific Requirement: § 200.318 (i) General procurement standards, states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore: §200.320 (f) Methods of procurement to be followed, states that procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when certain requirements have been met. Additionally, §200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non- Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; (b) collecting a certification from that person; (c) adding a clause or condition to the covered transaction with that person.Condition: During our audit, we noted contractual relationships under the Federal awards for which evidence of procurement procedures and documentation of SAM Exclusion checks were unavailable for our inspection. It is our understanding that some contracts were procured under noncompetitive (sole source) justification. However, in certain instances we were unable to review documentation detailing the history and rationale of the procurements. Cause: The Organization's processes in place during 2024 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Additionally, the Organization does not have a formal policy in place related to contractor screenings under CFR §200.213. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to. Additionally, the Organization may have inadvertently selected noncompetitive proposals method when the circumstances did not meet the requirements noted in § 200.320 (f) Methods of procurement to be followed, and thereby failing to administer full and open competition as required by the regulations. Finally, the Organization could inadvertently enter into a contractual relationship with an entity that is suspended, debarred or otherwise included on the US Federal sanction list. Questioned Costs: N/A Context: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Yes, continuation of Finding 2023-003 Recommendation: We then recommend that the Organization ensure its policy is distributed and communicated in a formal manner to its employees, and that management properly enforce compliance with its policy. All procurement actions should be clearly documented in writing and maintained in the vendor or contractor files. We also recommend that the Organization enhance its existing policy related to noncompetitive procurement to ensure include the five specific circumstances in which noncompetitive procurement can be used under CFR 200.320. Additionally, we recommend that the Organization enhance its policies to include screening procedures related to 200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.
Finding 2024-003 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #15.657 Criteria or Specific Requirement: § 200.318 (i) General procurement standards, states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore: §200.320 (f) Methods of procurement to be followed, states that procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when certain requirements have been met. Additionally, §200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non- Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; (b) collecting a certification from that person; (c) adding a clause or condition to the covered transaction with that person.Condition: During our audit, we noted contractual relationships under the Federal awards for which evidence of procurement procedures and documentation of SAM Exclusion checks were unavailable for our inspection. It is our understanding that some contracts were procured under noncompetitive (sole source) justification. However, in certain instances we were unable to review documentation detailing the history and rationale of the procurements. Cause: The Organization's processes in place during 2024 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Additionally, the Organization does not have a formal policy in place related to contractor screenings under CFR §200.213. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to. Additionally, the Organization may have inadvertently selected noncompetitive proposals method when the circumstances did not meet the requirements noted in § 200.320 (f) Methods of procurement to be followed, and thereby failing to administer full and open competition as required by the regulations. Finally, the Organization could inadvertently enter into a contractual relationship with an entity that is suspended, debarred or otherwise included on the US Federal sanction list. Questioned Costs: N/A Context: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Yes, continuation of Finding 2023-003 Recommendation: We then recommend that the Organization ensure its policy is distributed and communicated in a formal manner to its employees, and that management properly enforce compliance with its policy. All procurement actions should be clearly documented in writing and maintained in the vendor or contractor files. We also recommend that the Organization enhance its existing policy related to noncompetitive procurement to ensure include the five specific circumstances in which noncompetitive procurement can be used under CFR 200.320. Additionally, we recommend that the Organization enhance its policies to include screening procedures related to 200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.
Finding 2024-003 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #15.657 Criteria or Specific Requirement: § 200.318 (i) General procurement standards, states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore: §200.320 (f) Methods of procurement to be followed, states that procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when certain requirements have been met. Additionally, §200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non- Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; (b) collecting a certification from that person; (c) adding a clause or condition to the covered transaction with that person.Condition: During our audit, we noted contractual relationships under the Federal awards for which evidence of procurement procedures and documentation of SAM Exclusion checks were unavailable for our inspection. It is our understanding that some contracts were procured under noncompetitive (sole source) justification. However, in certain instances we were unable to review documentation detailing the history and rationale of the procurements. Cause: The Organization's processes in place during 2024 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Additionally, the Organization does not have a formal policy in place related to contractor screenings under CFR §200.213. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to. Additionally, the Organization may have inadvertently selected noncompetitive proposals method when the circumstances did not meet the requirements noted in § 200.320 (f) Methods of procurement to be followed, and thereby failing to administer full and open competition as required by the regulations. Finally, the Organization could inadvertently enter into a contractual relationship with an entity that is suspended, debarred or otherwise included on the US Federal sanction list. Questioned Costs: N/A Context: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Yes, continuation of Finding 2023-003 Recommendation: We then recommend that the Organization ensure its policy is distributed and communicated in a formal manner to its employees, and that management properly enforce compliance with its policy. All procurement actions should be clearly documented in writing and maintained in the vendor or contractor files. We also recommend that the Organization enhance its existing policy related to noncompetitive procurement to ensure include the five specific circumstances in which noncompetitive procurement can be used under CFR 200.320. Additionally, we recommend that the Organization enhance its policies to include screening procedures related to 200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.
Finding 2024-003 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #15.657 Criteria or Specific Requirement: § 200.318 (i) General procurement standards, states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore: §200.320 (f) Methods of procurement to be followed, states that procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when certain requirements have been met. Additionally, §200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non- Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; (b) collecting a certification from that person; (c) adding a clause or condition to the covered transaction with that person.Condition: During our audit, we noted contractual relationships under the Federal awards for which evidence of procurement procedures and documentation of SAM Exclusion checks were unavailable for our inspection. It is our understanding that some contracts were procured under noncompetitive (sole source) justification. However, in certain instances we were unable to review documentation detailing the history and rationale of the procurements. Cause: The Organization's processes in place during 2024 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Additionally, the Organization does not have a formal policy in place related to contractor screenings under CFR §200.213. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to. Additionally, the Organization may have inadvertently selected noncompetitive proposals method when the circumstances did not meet the requirements noted in § 200.320 (f) Methods of procurement to be followed, and thereby failing to administer full and open competition as required by the regulations. Finally, the Organization could inadvertently enter into a contractual relationship with an entity that is suspended, debarred or otherwise included on the US Federal sanction list. Questioned Costs: N/A Context: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Yes, continuation of Finding 2023-003 Recommendation: We then recommend that the Organization ensure its policy is distributed and communicated in a formal manner to its employees, and that management properly enforce compliance with its policy. All procurement actions should be clearly documented in writing and maintained in the vendor or contractor files. We also recommend that the Organization enhance its existing policy related to noncompetitive procurement to ensure include the five specific circumstances in which noncompetitive procurement can be used under CFR 200.320. Additionally, we recommend that the Organization enhance its policies to include screening procedures related to 200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.
Finding 2024-003 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #15.657 Criteria or Specific Requirement: § 200.318 (i) General procurement standards, states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore: §200.320 (f) Methods of procurement to be followed, states that procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when certain requirements have been met. Additionally, §200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non- Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; (b) collecting a certification from that person; (c) adding a clause or condition to the covered transaction with that person.Condition: During our audit, we noted contractual relationships under the Federal awards for which evidence of procurement procedures and documentation of SAM Exclusion checks were unavailable for our inspection. It is our understanding that some contracts were procured under noncompetitive (sole source) justification. However, in certain instances we were unable to review documentation detailing the history and rationale of the procurements. Cause: The Organization's processes in place during 2024 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Additionally, the Organization does not have a formal policy in place related to contractor screenings under CFR §200.213. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to. Additionally, the Organization may have inadvertently selected noncompetitive proposals method when the circumstances did not meet the requirements noted in § 200.320 (f) Methods of procurement to be followed, and thereby failing to administer full and open competition as required by the regulations. Finally, the Organization could inadvertently enter into a contractual relationship with an entity that is suspended, debarred or otherwise included on the US Federal sanction list. Questioned Costs: N/A Context: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Yes, continuation of Finding 2023-003 Recommendation: We then recommend that the Organization ensure its policy is distributed and communicated in a formal manner to its employees, and that management properly enforce compliance with its policy. All procurement actions should be clearly documented in writing and maintained in the vendor or contractor files. We also recommend that the Organization enhance its existing policy related to noncompetitive procurement to ensure include the five specific circumstances in which noncompetitive procurement can be used under CFR 200.320. Additionally, we recommend that the Organization enhance its policies to include screening procedures related to 200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.
Federal Agency: Department of Health and Human Services Federal Program Name: Substance Abuse and Mental Health Services Projects of Regional and National Significance Assistance Listing Number: 93.243 Federal Award Identification Number and Year: 1H79SM087513-01 - 2024 Award Period: September 30, 2023 through September 29, 2027 Type of Finding: • Other Matters Criteria or specific requirement: According to 2 CFR 200.318, non-federal entities must have and use documented procurement procedures that reflect applicable state and local laws and regulations, and conform to federal law and the standards identified in 2 CFR 200.318 through 2 CFR 200.327. Condition: During our review of the organization's procurement processes, it was noted that the organization does not have a procurement policy that complies with federal requirements. Specifically, the policy does not address key elements such as competition, cost or price analysis, and documentation requirements as outlined in federal regulations. Questioned costs: None Context: Policies exist, but do not meet requirements. There are no requirements to retain documentation related to comparison or analysis prior to purchase or procurement. Cause: The absence of a compliant procurement policy appears to be due to a lack of awareness of the specific federal requirements and the absence of a formal process to review and update organizational policies to ensure compliance. Effect: Without a procurement policy that complies with federal requirements, the organization is at risk of non-compliance with grant conditions, which could lead to questioned costs, potential disallowance of expenditures, and jeopardize future funding opportunities. Recommendation: We recommend that the Organization develop and implement a procurement policy that complies with federal requirements, including provisions for competition, cost or price analysis, and proper documentation. Views of responsible officials: There is no disagreement with the audit finding.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. 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 Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. 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 Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. 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 Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. 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 Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. 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 Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. 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 Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. 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 Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
2024-003 U.S. Department of Treasury, Federal Financial Assistance Listing #21.027, COVID-19 – Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.2096 outlines the requirements the non-federal entity verify vendors for which it plans to enter into a covered transaction are not debarred, suspended, or otherwise excluded. Condition: We noted that while the County does have a purchasing policy, elements as required by Uniform Guidance are absent from the policy. In addition, we noted the County did not retain the supporting documentation indicating they had verified vendors they were entering into covered transactions with were neither suspended nor debarred. Cause: The County had not had single audits performed until recently as a result of the increase in funding due to the COVID‐19 pandemic. Because of this, they had not updated their purchasing policy to be in compliance with Uniform Guidance. This also impacted the County’s purchasing and procurement checklist for updating it to including retaining the support the County verified vendors were neither suspended nor debarred in the contract’s procurement file. Effect: While our testing noted no instances of noncompliance, the absence of internal controls over compliance as it relates to having a Uniform Guidance compliant policy, could lead the County to enter into covered transactions that are not compliant with federal regulations. Questioned Costs: None reported. Context/Sampling: Sampling was not used to test the policy. Repeat Finding from Prior Year(s): No Recommendation: The County should review the applicable provisions of the CFR to ensure their written procurement policy is compliant with Uniform Guidance requirements. Additionally, the County should review their checklist and/or document retention requirements for contracts to be sure it includes the support the County verified the vendor was neither suspended nor debarred. Views of Responsible Officials: Management agrees with the finding.
Finding The U. S. Code of Federal Regulations Title 2, Part 200.318, of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states that non-Federal entities must have and use its own documented procurement procedures which reflect State and local laws and regulations provided that the procurements conform to applicable Federal law and the standards identified within that section. The Code of Alabama 1975, Title 39, which is a State law, requires the construction, installation, repair, or renovation of public buildings in excess of $100,000.00 that are paid, in whole or part, with public funds to be bid under the provisions of the Public Works Law. The Autauga County Board of Education (the “Board”) entered into two public works contracts in fiscal year 2024 for the purchase and installation of network equipment totaling $171,824.78 and for the purchase and installation of network switches, wireless access points and digital signage totaling $199,292.13 of which $321,490.07 of COVID-19 Education Stabilization Funds were expended during the audit period. The Board did not bid the projects. Instead, the Board utilized purchasing cooperative contracts which are not allowed under the Public Works Law. As a result, the Board did not comply with the Uniform Guidance procurement requirements for these purchases. Recommendation The Board should ensure compliance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR 200.318 and the Code of Alabama 1975, Title 39.
Finding The U. S. Code of Federal Regulations Title 2, Part 200.318, of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states that non-Federal entities must have and use its own documented procurement procedures which reflect State and local laws and regulations provided that the procurements conform to applicable Federal law and the standards identified within that section. The Code of Alabama 1975, Title 39, which is a State law, requires the construction, installation, repair, or renovation of public buildings in excess of $100,000.00 that are paid, in whole or part, with public funds to be bid under the provisions of the Public Works Law. The Autauga County Board of Education (the “Board”) entered into two public works contracts in fiscal year 2024 for the purchase and installation of network equipment totaling $171,824.78 and for the purchase and installation of network switches, wireless access points and digital signage totaling $199,292.13 of which $321,490.07 of COVID-19 Education Stabilization Funds were expended during the audit period. The Board did not bid the projects. Instead, the Board utilized purchasing cooperative contracts which are not allowed under the Public Works Law. As a result, the Board did not comply with the Uniform Guidance procurement requirements for these purchases. Recommendation The Board should ensure compliance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR 200.318 and the Code of Alabama 1975, Title 39.
Criteria: 2 CFR Section 200.318 requires that the non-federal entity must have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a federal award or subaward. The non-federal entity’s documented procurement procedures must conform to the procurement standard identified in §§ 200.317 through 200.327 and must be adhered to. Condition and context: During testing of the Alliance’s controls on compliance over procurement and suspension and debarment, we identified the Alliance did not have all the needed documentation around the suspension and debarment check. Cause: Controls and processes were not effectively designed to ensure there was all proper documentation around the suspension and debarment check. Effect: The Alliance was not fully in compliance with the procurement and suspension and debarment check requirements of the Uniform Guidance. Questioned Costs: None. Identification as a Repeat Finding: N/A. Recommendation: We recommend that the Alliance review its current processes and controls over procurement and suspension and debarment to ensure all required documentation is retained and available. Views of Responsible Official: Management agrees with the finding. See Corrective Action Plan.
2024-001 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Federal Program Information Funding Agency: U.S. Department of the Treasury Federal ALN: 21.027 Criteria Per 2 CFR 200.214, non-federal entities are prohibited from contracting with parties that are suspended or debarred. 2 CFR 200.318(i) also states that "subrecipients 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." Condition The Chamber has a procurement policy in place; however, the Chamber neglected to verify if vendors had been suspended or debarred, in accordance with stated regulations. The Chamber also did not maintain sufficient records to document the rationale for the procurement method used for a transaction exceeding the small purchase threshold. Questioned Costs $25,000 Context A sample of 3 vendors was made from a population of 3 vendors whose expenses exceeded the covered transaction threshold that were charged to the major program. Of the 3 sampled vendors, the Chamber neglected to check the suspension or debarment status of 1 vendor prior to entering a covered transaction of $25,000. A sample of 3 vendors was made from a population of 3 vendors whose total transactions exceeded the small purchase threshold. Of the 3 sampled vendors, the Chamber did not maintain sufficient records to document the rationale of using a noncompetitive procurement method for a small purchase transaction. Cause The Chamber claimed that they had been conducting business transactions with this vendor prior to having a procurement policy in place and did not implement the procurement policy on already developed business relationships. The Chamber also did not consider documenting its rationale for continuing to use the vendor for services that exceeded the small purchase threshold that were charged to the major program. Effect Purchases may have occurred that do not follow the policy, and contracts with vendors that had been suspended or debarred could have been awarded and not detected. The Chamber also did not conduct procurement transaction "in a manner that provides full and open competition," as defined in 2 CFR 200.319(a). Repeat Finding Yes - reference 2023-001. Auditor's Recommendations Tacoma-Pierce County Chamber of Commerce should include a provision in all contracts transacted in conjunction with using funds originating from a federal award grant, with respect to suspension and debarment, communicate all requirements for procurement to staff and establish procedures to verify that vendors are not suspended or debarred. Chamber staff should also perform an independent status check of vendors in sam.gov prior to entering into an agreement and retain the search results. The Chamber should also evaluate its current method of procurement and educate staff that if using funds from a federal award to enter into a transaction exceeding the small purchase threshold, that full and open competition must be facilitated, despite any prior relationships with vendors.
Criteria or Specific Requirement: Per 2 CFR §200.318 - §200.326, non-federal entities must follow procurement procedures that ensure full and open competition and maintain proper documentation of procurement transactions. Additionally, under 2 CFR §200.213, entities must verify that vendors and subrecipients are not suspended or debarred before entering into contracts funded by federal awards. Condition: AIRA did not retain sufficient/updated documentation to support compliance with Uniform Guidance procurement standards. Specifically: • Procurement files lacked evidence of cost/price analysis and vendor selection criteria for purchases exceeding the micro-purchase threshold of $10,000. • The entity did not retain verification records confirming that selected vendors were not suspended or debarred in SAM.gov before contract execution. Cause: The deficiency appear to result from inadequate internal controls over procurement documentation and a lack of formalized procedures ensuring compliance with federal procurement and debarment requirements. Effect or Potential Effect: Failure to maintain proper procurement documentation and verify vendor eligibility increases the risk of noncompliance with federal requirements. This may lead to questioned costs and potential disallowance of federal expenditures. Questioned Costs: Not applicable as there were no questioned costs related to noncompliance. Recommendation: We recommend AIRA strengthen its internal controls over procurement documentation by considering the following: 1. Implementing a standardized procurement checklist to ensure all required documentation is maintained. A procurement checklist includes key compliance steps such as: a. Documentation of competitive procurement such as bids, proposals, or price comparisons. b. Justification for vendor selection, including cost/price analysis. c. Approval signatures from designated officials. d. Verification of vendor eligibility through SAM.gov before contract execution. 2. Establishing a formal review process to verify and document vendor eligibility through SAM.gov before awarding federally funded contracts. The entity should implement a procurement control process where a designated staff member completes the following steps: a. Searches SAM.gov for each vendor before contract execution. b. Prints and retains a copy of the vendor’s eligibility verification. c. Signs and dates a verification form certifying the check was performed. d. Includes this form in the procurement file. 3. Conducting regular training for staff involved in procurement to reinforce federal compliance requirements. The training should cover: a. Procurement methods (small purchase, micro-purchase, simplified acquisitions, competitive proposals, sealed bids, sole source) competitive proposals, sealed bids) b. Documentation requirements under 2 CFR Part 200. c. Vendor debarment checks and maintaining verification records. d. Retention requirements for procurement documents. Repeat finding from prior year: No Views of Responsible Officials: Management agrees with the finding. See attached corrective action plan.
Criteria or Specific Requirement: Per 2 CFR §200.318 - §200.326, non-federal entities must follow procurement procedures that ensure full and open competition and maintain proper documentation of procurement transactions. Additionally, under 2 CFR §200.213, entities must verify that vendors and subrecipients are not suspended or debarred before entering into contracts funded by federal awards. Condition: AIRA did not retain sufficient/updated documentation to support compliance with Uniform Guidance procurement standards. Specifically: • Procurement files lacked evidence of cost/price analysis and vendor selection criteria for purchases exceeding the micro-purchase threshold of $10,000. • The entity did not retain verification records confirming that selected vendors were not suspended or debarred in SAM.gov before contract execution. Cause: The deficiency appear to result from inadequate internal controls over procurement documentation and a lack of formalized procedures ensuring compliance with federal procurement and debarment requirements. Effect or Potential Effect: Failure to maintain proper procurement documentation and verify vendor eligibility increases the risk of noncompliance with federal requirements. This may lead to questioned costs and potential disallowance of federal expenditures. Questioned Costs: Not applicable as there were no questioned costs related to noncompliance. Recommendation: We recommend AIRA strengthen its internal controls over procurement documentation by considering the following: 1. Implementing a standardized procurement checklist to ensure all required documentation is maintained. A procurement checklist includes key compliance steps such as: a. Documentation of competitive procurement such as bids, proposals, or price comparisons. b. Justification for vendor selection, including cost/price analysis. c. Approval signatures from designated officials. d. Verification of vendor eligibility through SAM.gov before contract execution. 2. Establishing a formal review process to verify and document vendor eligibility through SAM.gov before awarding federally funded contracts. The entity should implement a procurement control process where a designated staff member completes the following steps: a. Searches SAM.gov for each vendor before contract execution. b. Prints and retains a copy of the vendor’s eligibility verification. c. Signs and dates a verification form certifying the check was performed. d. Includes this form in the procurement file. 3. Conducting regular training for staff involved in procurement to reinforce federal compliance requirements. The training should cover: a. Procurement methods (small purchase, micro-purchase, simplified acquisitions, competitive proposals, sealed bids, sole source) competitive proposals, sealed bids) b. Documentation requirements under 2 CFR Part 200. c. Vendor debarment checks and maintaining verification records. d. Retention requirements for procurement documents. Repeat finding from prior year: No Views of Responsible Officials: Management agrees with the finding. See attached corrective action plan.
Criteria or Specific Requirement: Per 2 CFR §200.318 - §200.326, non-federal entities must follow procurement procedures that ensure full and open competition and maintain proper documentation of procurement transactions. Additionally, under 2 CFR §200.213, entities must verify that vendors and subrecipients are not suspended or debarred before entering into contracts funded by federal awards. Condition: AIRA did not retain sufficient/updated documentation to support compliance with Uniform Guidance procurement standards. Specifically: • Procurement files lacked evidence of cost/price analysis and vendor selection criteria for purchases exceeding the micro-purchase threshold of $10,000. • The entity did not retain verification records confirming that selected vendors were not suspended or debarred in SAM.gov before contract execution. Cause: The deficiency appear to result from inadequate internal controls over procurement documentation and a lack of formalized procedures ensuring compliance with federal procurement and debarment requirements. Effect or Potential Effect: Failure to maintain proper procurement documentation and verify vendor eligibility increases the risk of noncompliance with federal requirements. This may lead to questioned costs and potential disallowance of federal expenditures. Questioned Costs: Not applicable as there were no questioned costs related to noncompliance. Recommendation: We recommend AIRA strengthen its internal controls over procurement documentation by considering the following: 1. Implementing a standardized procurement checklist to ensure all required documentation is maintained. A procurement checklist includes key compliance steps such as: a. Documentation of competitive procurement such as bids, proposals, or price comparisons. b. Justification for vendor selection, including cost/price analysis. c. Approval signatures from designated officials. d. Verification of vendor eligibility through SAM.gov before contract execution. 2. Establishing a formal review process to verify and document vendor eligibility through SAM.gov before awarding federally funded contracts. The entity should implement a procurement control process where a designated staff member completes the following steps: a. Searches SAM.gov for each vendor before contract execution. b. Prints and retains a copy of the vendor’s eligibility verification. c. Signs and dates a verification form certifying the check was performed. d. Includes this form in the procurement file. 3. Conducting regular training for staff involved in procurement to reinforce federal compliance requirements. The training should cover: a. Procurement methods (small purchase, micro-purchase, simplified acquisitions, competitive proposals, sealed bids, sole source) competitive proposals, sealed bids) b. Documentation requirements under 2 CFR Part 200. c. Vendor debarment checks and maintaining verification records. d. Retention requirements for procurement documents. Repeat finding from prior year: No Views of Responsible Officials: Management agrees with the finding. See attached corrective action plan.
2024-001: PROCUREMENT (repeat comment) Type: Considered a material weakness in internal control over compliance/noncompliance Program: ALN 93.969 Certified Community Behavioral Health Clinics (CCBHC) Expansion Grants Criteria: Per 2 CFR section 200.318, the non-Federal entity, “…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.” Condition: During testing, it was noted that the CMHSP had not followed procurement requirements for the contract entered into for project evaluation and coordination services. This is the same contract that produced a material finding in the prior year single audit. Cause/Effect: Management oversight. Questioned Cost: $150,000 – the amount paid during the fiscal year pursuant to contract in question. Recommendation: We recommend that the CMHSP review/update policies and procedures to ensure that all federal requirements for procurements are followed for future contracts entered into with federal funds. Management’s Resp: Management is in agreement with this recommendation. Also, the grantor was notified of this finding and has notified the CMHSP that there is no elevated level of risk moving forward through the remainder of the grant cycle.
Identification of the Federal Program - Coronavirus State and Local Fiscal Recovery Funds - Assistance Listing Number 21.027. Criteria - According to 2 CFR 200.318, recipients under a Federal award or subaward must maintain and use documented procedures for procurement transactions. These procedures must ensure full and open competition, proper oversight, and compliance with applicable regulations. The City’s procurement policy requires that all contracts exceeding $15,000 be subjected to competitive bidding and approved by the City Council before execution. This requirement ensures transparency, accountability, and proper oversight of public funds. Furthermore, the Code of Alabama § 11-43C-28 (2023) states that a record of the proceedings of every meeting of the council shall be kept, and every resolution or ordinance passed by the council must be recorded, and the record of the proceedings of the meeting shall, when approved by the council, be signed by the president of the council and the City Clerk. Condition - During the audit, a contract in the amount of $1,338,870 was identified that had undergone competitive bidding; however, there was no documentation in the City Council meeting minutes indicating that the contract had been approved by the City Council. It is unclear whether the City Council approved the contract, or if the approval was not properly documented. Cause - The is a lack of procedural oversight and inadequate documentation practices. Effect - Failure to obtain and/or document City Council approval for contracts over $15,000 increases the risk of unauthorized expenditures, potential noncompliance with procurement policies, and reduced transparency in financial decision making. This could also undermine public trust and limit oversight of municipal contracts. Additionally, noncompliance with 2 CFR 200.318 could place federal funding at risk or result in audit findings that require corrective action. Failure to follow record-keeping guidelines outlined in the Code of Alabama § 11-43C-28 (2023) further weakens transparency and accountability in municipal governance. Recommendation - The City should ensure that all contracts exceeding $15,000 are formally approved by the City Council and that such approvals are properly documented in the official meeting minutes. Additionally, the City should implement stronger controls to verify and maintain documentation of contract approvals to ensure compliance with both local procurement policies and federal regulations under 2 CFR 200.318. The City should also adhere to Code of Alabama § 11-43C-28 (2023) by maintaining complete and accurate records of City Council proceedings, including approvals of contracts, to promote transparency and accountability.
Finding No. 2024-001 – Procurement Award Information Cluster: Not applicable Grantor: Department of Health and Human Services (DHHS) Award Name: Community Project Funding/Congressionally Directed Spending - Construction Award Number: 6 CE1HS52894‐01‐04, 6 CE1HS52345‐01‐05 Award Year: FY2024 Assistance Listing Number: 93.493 Assistance Listing Title: Congressional Directives Pass-through Entity: Not applicable Criteria In accordance with 2 CFR 200.318 the entity must maintain procurement records of sufficient detail that include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. In accordance with 2 CFR 200.324 (a), the recipient or subrecipient must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. Condition In our testing, 2 of 2 samples totaling $1,874,650 were in excess of the System’s simplified acquisition threshold of $250,000. These 2 selections funded separate capital expenditures, both of which were initially funded by nonfederal dollars. Subsequently, federal earmarks were received to partially fund these projects. As such, the System did not have support that would be required for a federal purchase. More specifically, the System did not maintain support for the procurement method selected, contract type selection, contractor selection or rejection, and the basis for the contract price in accordance with 2 CFR 200.318. In addition, the 2 selections also did not have evidence maintained of an independent cost or price analysis in accordance with CFR 200.324 (a). Cause In both circumstances, partial funding was requested to supplement larger purchases for which it was not anticipated that federal funding would be used; as such, compliance with federal funding requirements was not contemplated and thus typical support that would be required for a federal purchase was not followed. Effect The System could be entering into transactions which are not the most economical or practical procurements for the Federal Government and such transaction could be unallowed or result in unallowable costs. Questioned Costs None noted. Recommendation We recommend that the System update its procurement policy so that contemporaneous documentation and retention of evidence for the selection of each vendor that meets the System’s relevant procurement thresholds is maintained consistently in the procurement files. Documentation should clearly outline the rationale for contractor selection and the System’s independent cost or price analysis. Management’s Views and Corrective Action Plan Management’s views and corrective action plan is included at the end of this report.
Finding No. 2024-001 – Procurement Award Information Cluster: Not applicable Grantor: Department of Health and Human Services (DHHS) Award Name: Community Project Funding/Congressionally Directed Spending - Construction Award Number: 6 CE1HS52894‐01‐04, 6 CE1HS52345‐01‐05 Award Year: FY2024 Assistance Listing Number: 93.493 Assistance Listing Title: Congressional Directives Pass-through Entity: Not applicable Criteria In accordance with 2 CFR 200.318 the entity must maintain procurement records of sufficient detail that include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. In accordance with 2 CFR 200.324 (a), the recipient or subrecipient must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. Condition In our testing, 2 of 2 samples totaling $1,874,650 were in excess of the System’s simplified acquisition threshold of $250,000. These 2 selections funded separate capital expenditures, both of which were initially funded by nonfederal dollars. Subsequently, federal earmarks were received to partially fund these projects. As such, the System did not have support that would be required for a federal purchase. More specifically, the System did not maintain support for the procurement method selected, contract type selection, contractor selection or rejection, and the basis for the contract price in accordance with 2 CFR 200.318. In addition, the 2 selections also did not have evidence maintained of an independent cost or price analysis in accordance with CFR 200.324 (a). Cause In both circumstances, partial funding was requested to supplement larger purchases for which it was not anticipated that federal funding would be used; as such, compliance with federal funding requirements was not contemplated and thus typical support that would be required for a federal purchase was not followed. Effect The System could be entering into transactions which are not the most economical or practical procurements for the Federal Government and such transaction could be unallowed or result in unallowable costs. Questioned Costs None noted. Recommendation We recommend that the System update its procurement policy so that contemporaneous documentation and retention of evidence for the selection of each vendor that meets the System’s relevant procurement thresholds is maintained consistently in the procurement files. Documentation should clearly outline the rationale for contractor selection and the System’s independent cost or price analysis. Management’s Views and Corrective Action Plan Management’s views and corrective action plan is included at the end of this report.
Criteria – The Agency has an established Procurement Policy which sets forth threshold and documentation requirements for management to follow to ensure that the Agency is in compliance with local as well as federal requirements. The Agency must follow the procurement standards established at 2 CFR sections 200.318 through 200.26. In addition, as part of the internal controls over federal award programs, the Agency shall maintain records in sufficient detail to document procedures were followed to ensure contracts are awarded respective to local and federal requirements. Condition - During our audit of Public Housing transactions, we noted instances where the procurement process was not adequately documented to ensure compliance with local and federal requirements. These items are summarized as follows: • Procurement Policy – During our audit, we noted the Agency has not updated its policy for several years. The policy not only should comply with local requirements but also the compliance requirements contained in 2 CFR sections 200.318 through 200.326. The current policy applies to regulations at 24 CFR 85.36 and not the current language requirements. • Procurement Approval – The Agency’s current policy requires any procurement in excess of $2,000 but not exceeding $100,000, no less than three price quotations shall be obtained where practical. The names, addresses and/or telephone numbers of the offerors and person contacted, and the date and amount of each quotation shall be recorded and maintained as public record. During our audit we noted the Agency entered into a contract for flooring and expended $43,073 but had no documentation to support that bids were obtained other than the vendor that was awarded the contract. Bids should have been obtained and documented as noted above. • Wage Rates – Projects funded with Public Housing Funds are required to comply with Wage Rate Requirements contained in Par 4, 20-001 which requires all labors and mechanics employed by contractors or subcontractor to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project. During our audit we noted the flooring contract as noted in the previous bullet point was not monitored for the prevailing wage requirement. Cause – The Agency’s internal controls are not adequate over the documentation of procurement procedures. Effect or Potential Effect - The Agency’s internal controls over procurement documentation is not adequate and the procurement policy is not updated to reflect the Federal requirements contained in 2 CFR sections 200.318 through 200.326. Recommendation - We recommend the Agency make a concentrated effort to maintain the procurement files in a manner sufficient to ensure proper procurement procedures were followed. This documentation should include the significant history of each procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection and the basis for the contract price. In addition, when required the Wage Rate compliance procedures should be documented. View of Responsible Official: Management agrees with the Finding.
Program Information: U.S. Department of the Interior Single Agreement – Assistance Listing #15.036 Award Number: A18AV00341 Award Period: 10/01/2023 – 9/30/2024 Criteria: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. 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. Per 2 CFR § 200.303 Internal controls, 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). Condition/Context: 1 of 3 procurement samples selected for testing had no documentation of bidding, alternative price quotes, or sole source documentation. Additionally, for 1 of 1 Individually Important Items and 2 of 2 suspension and debarment samples selected for testing, NWIFC could not provide support showing a SAM.gov check was performed prior to conducting business with the vendors. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: It appears the policies and procedures for procurement and suspension and debarment were not followed. Effect: Without solicitation from an adequate number of qualified sources, NWIFC is at risk of over-spending on projects and, thus, leaving fewer resources available to fulfill the mission of NWIFC. Additionally, NWIFC could be subject to other sanctions from funding agencies if they determine that programs did not assure vendors were properly checked for suspension and debarment. Questioned Costs: $25,750 for procurement. This amount represents procurement transactions selected for testing that lacked required documentation of competitive bidding, price comparisons, or sole source justifications. As a result, these costs do not meet the allowability and procurement standards under 2 CFR 200.318–200.320 and are therefore questioned. Not applicable for suspension and debarment. While internal controls were not followed, no specific transactions were identified that violated the cost allowability requirements. Repeat Finding: Yes, finding #2023-003. Recommendation: We recommend that the NWIFC adhere to program policies and procedures as documented and supporting documentation is kept available for review. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Finding Number: 2024-010 Prior Year Finding Number: N/A Compliance Requirement: Procurement and Suspension and Debarment Program: U.S. Department of the Treasury COVID-19 – Coronavirus Capital Projects Fund ALN: 21.029 Award #: CPFFN0167 Award Year: 02/09/2022 – 12/31/2026 Government Department/Agency: District of Columbia Public Library (DCPL) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Section 200.318(a), General Procurement Standards, the non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, 2 CFR Section 200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to include but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. All procurement transactions must be conducted in a manner providing full and open competition consistent in accordance with 2 CFR Section 200.319 and must be performed using the appropriate procurement method as outlined in 2 CFR Section 200.320. In accordance with 2 CFR Section 200.320(c), Noncompetitive procurement. There are specific circumstances in which the recipient or subrecipient may use a noncompetitive procurement method. The noncompetitive procurement method may only be used if one of the following circumstances applies: (1) The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be fulfilled by a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from providing public notice of a competitive solicitation; (4) The recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity provides written approval; or (5) After soliciting several sources, competition is determined inadequate. Condition – During our testing of procurement and suspension and debarment requirements, we examined the two (2) procurement contracts that comprised the entire procurement population. Based on the procedures performed, we identified one (1) contract, valued at $278,259, out of the two (2) contracts totaling $8,185,708, in which DCPL used a single source or sole source justification for the selection rationale. However, this justification did not comply with the requirements set forth in 2 CFR Section 200.320(c). Questioned Costs – Not determinable. Context – This is a condition identified per review of DCPL’s compliance with the specified requirements using a statistically valid sample. Effect – Failure to adhere to the procurement procedures specified in the Uniform Administrative Requirements may lead to the Federal agency disallowing the procurement and associated costs. Cause – While DCPL adhered to their policies and procedures for private expenditures, the agency did not adhere to federal procurement requirements (2 CFR Section 200.320(c)) listed above to support noncompetitive procurement on the requirements to use sole source. Recommendation – We recommend that management establish the requisite internal control policies and procedures to ensure that all procurements reported under the federal program are in compliance. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DCPL concurs with the auditor’s findings and recommendations. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-002 Assistance Listing, Federal Agency, and Program Name 93.912 Small Healthcare Provider Quality Improvement Program Federal Award Identification Number and Year HB147075 2022 Pass through Entity N/A Finding Type Material weakness Repeat Finding No Criteria Federal regulations require entities receiving federal funds to maintain a written procurement policy that complies with federal, state, and local regulations and that covers the different procurement methods allowed under the 2 CFR 200 ("Uniform Guidance"). Recipients are also required to maintain internal controls to ensure procurement transactions are carried out in accordance with that written policy and the requirements of 2 CFR 200.318 through 327. Condition Prisma Health's written procurement policy and procedures are not compliant with the requirements of the Uniform Guidance, and Prisma does not have the internal controls in place to ensure that procurement decisions are made in accordance with the requirements contained in 2 CFR 200.318 through 327. Questioned Costs N/A If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed N/A Context Prisma Health did not have a written procurement policy that adhered to the requirements of 2 CFR 200.318 through 200.327 and did not have procedures in place to ensure procurement decisions were made in accordance with those requirements. Cause and Effect The absence of a Uniform Guidance compliant procurement policy or internal controls to ensure procurement funded with federal awards follow the requirements in 2 CFR 200.318 through 327 increases the risk that the organization may not use federal funds for the purchase of goods and services in accordance with the requirements of the Uniform Guidance, potentially leading to noncompliance and potential questioned costs. Recommendation Prisma Health should implement a subsection into the existing procurement policy that is fully compliant with the requirements of the Uniform Guidance. This should include details on the various procurement methods, applicable thresholds, required documentation, and measures to ensure full and open competition. Views of Responsible Officials and Corrective Action Plan Prisma Health acknowledges this finding and will develop and implement a Uniform Guidance compliant procurement policy within the next month. The policy will be reviewed and approved by the CFO, head of Procurement and representatives of the Grants team. Impacted individuals will be informed and trained.
Finding 2024-005 – Procurement Policy (Repeat Finding 2023-004) Criteria: In accordance with Uniform Guidance 2 CFR, Part §200.318 "General Procurement Standards", the non-federal entity must have and use documented procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a federal award or subaward. The non-federal entity's document procedures must conform to the procurement standards identified in 2 CFR, Part §200.317 - §200.327. Condition: During our review of the Coalition's Policies and Procedures, we determined that the Coalition's Procurement policy does not comply with 2 CFR, Part §200.317 - §200.327. Questioned Costs: None Cause: The Coalition was unaware of the changes in General Procurement Standards within Uniform Guidance and therefore does not have sufficiently established control policies and procedures to comply with 2 CFR, Part §200.317 - §200.327. Effect: The Coalition does not have the ability to determine if disbursements, projects, and bids comply with 2 CFR, Part §200.317 - §200.327. Recommendation: We recommend the Coalition becomes familiar with requirements of 2 CFR, Part §200.317 - §200.327. and establishes appropriate internal control policies and procedures related to procurement and that all staff be trained in those policies and procedures, so they are familiar with the requirements. We further recommend no contract or agreement be awarded by the Coalition in which appropriate procurement policies have not been followed. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2024-005 – Procurement Policy (Repeat Finding 2023-004) Criteria: In accordance with Uniform Guidance 2 CFR, Part §200.318 "General Procurement Standards", the non-federal entity must have and use documented procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a federal award or subaward. The non-federal entity's document procedures must conform to the procurement standards identified in 2 CFR, Part §200.317 - §200.327. Condition: During our review of the Coalition's Policies and Procedures, we determined that the Coalition's Procurement policy does not comply with 2 CFR, Part §200.317 - §200.327. Questioned Costs: None Cause: The Coalition was unaware of the changes in General Procurement Standards within Uniform Guidance and therefore does not have sufficiently established control policies and procedures to comply with 2 CFR, Part §200.317 - §200.327. Effect: The Coalition does not have the ability to determine if disbursements, projects, and bids comply with 2 CFR, Part §200.317 - §200.327. Recommendation: We recommend the Coalition becomes familiar with requirements of 2 CFR, Part §200.317 - §200.327. and establishes appropriate internal control policies and procedures related to procurement and that all staff be trained in those policies and procedures, so they are familiar with the requirements. We further recommend no contract or agreement be awarded by the Coalition in which appropriate procurement policies have not been followed. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
2024-001: PROCUREMENT Type: Considered a material weakness in internal control over compliance/noncompliance Program: ALN 93.696 Certified Community Behavioral Health Clinics (CCBHC) Expansion Grants Criteria: Per 2 CFR section 200.318, the non-Federal entity, “…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.” Condition: During testing, it was noted that the CMHSP had not followed procurement requirements for the contract entered into for project evaluation and coordination services. Cause/Effect: Management oversight. Questioned Cost: $150,000 – the amount paid during the fiscal year pursuant to contract in question. Recommendation: We recommend that the CMHSP review/update policies and procedures to ensure that all federal requirements for procurements are followed for future contracts entered into with federal funds. Management’s Resp: Management is in agreement with this recommendation. Also, the grantor was notified of this finding and has notified the CMHSP that there is no elevated level of risk moving forward through the remainder of the grant cycle.