2025-002 Procurement Supporting Documentation CFDA No: 93.434 Program Name: Preschool Development Grants Award Number: 25FPDGCN-510841-01A Federal Agency: U.S. Department of Health and Human Services (HHS) Pass-Through Grantor: Arizona Department of Education Compliance Requirement: L. Procurement, Suspension and Debarment Questioned Costs: $29,281 Summary of Finding: Material weakness in internal controls over compliance which resulted in a qualified opinion on federal program compliance. Repeat Finding? No Condition Heartwood could not provide documentation for the selection of two vendors within the Simplified Acquisition Threshold, which totaled $29,281. The population of vendors who met applicable thresholds was tested and totaled four vendors. 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 200.318 through 200.327. Specifically, 2 CFR 200.318(i) states “The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price.” Cause Heartwood did not retain price or rate quotations from an adequate number of qualified sources or document justification for the use of sole source vendors. 2 CFR 200.320(a)(2)(i) states: “Unless specified by the Federal agency, the recipient or subrecipient may exercise judgment in determining what number is adequate.” Effect The inability of Heartwood to retain procurement documentation impairs the ability to demonstrate compliance with federal requirements, increases the risk of unallowable or unreasonable costs, and may result in repayment/disallowance of the related expenditures. Recommendation Primarily, Heartwood should enforce their written procurement and documentation procedures which are prepared as part of grant award acceptance. Then, Heartwood should ensure every purchase is supported, and retained in a central file. At a minimum, the school should: Establish checklist for every purchase (paper or electronic), retained centrally, that includes: Requisition/need justification and funding source, in this instance Preschool Development Grant (PDG) Evidence of price reasonableness: quotes from an adequate number of qualified sources (or documented attempts) Basis for vendor selection Approvals (who approved, when) Contract/purchase order, invoice, and proof of receipt/performance Required contract provisions (when applicable) In the case of sole source procurements, justification dcumentation for the use of the vendor. Suspension/debarment verification (SAM check) when required by the school’s policy/pass-through requirements Centralize record retention Store all procurement documentation in a single shared location (e.g., secured drive) by grant year and vendor, with a naming convention. Assign a specific role (grant manager/business office) responsible for completeness before payment.
Agency: U.S. Department of Health and Human Services Federal Assistance Listing Number: 93.528, National Forum for State and Territorial Chief Executives HHS OA, Yr 10 and Yr 11, National Forum Contract Number: 2U98OA09028 Criteria: In accordance with 2 CFR §200.318(a), General Procurement Standards, the nonfederal entity must use its own documented procurement procedures which reflect applicable State, local and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, §200.318(i) states that the nonfederal entity must maintain records sufficient to detail the history of the procurement. These records are required to include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection and the basis for the contract price. In accordance with §200.213 and §180.300, Suspension and Debarment, nonfederal entities cannot enter into awards, subawards or contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a nonfederal entity. In addition, in accordance with §180.415(b), nonfederal entities cannot renew or extend covered transactions (other than no-cost time extension) with any excluded person or under which an excluded person is a principal, unless the nonfederal entity obtains an exception under §180.135. Condition: During our testing of the internal controls over compliance and compliance with procurement, suspension and debarment compliance requirements, we identified one procurement agreement out of a total of three tested where the Organization did not have documented controls over the application of their procurement policy. Additionally, the Organization did not retain documentation of controls over their verification that the vendor contracted was not suspended or debarred prior to entering into the contract. Management has subsequently determined that the vendor was not suspended or debarred. Questioned Costs: None. Context: The population consisted of three vendor charges or contracts entered into during the period that exceeded the Organization's micro-purchase policy. Three of the items were tested, two of which had no exceptions in testing and the other had the exceptions identified in the condition above. The one exception was paid $31,661 from the award. Cause: NGAC's personnel did not adhere to NGAC's documented policies and procedures for ensuring proper suspension and debarment validations were performed prior to entering a covered transaction and did not retain proper documentation supporting procurement controls and compliance. Effect: Failure to obtain and retain sufficient supporting documentation could result in an incorrect application of procurement policies and procedures. Failure to timely verify that a vendor is not suspended or debarred could result in transactions involving unreasonable costs or result in unintentionally entering a contract with an entity that is barred from performing work for the Federal government. Repeat Finding: This finding was identified during the year ending June 30, 2024 as finding 2024-002. Recommendation: We recommend management ensure that procurement and suspension and debarment regulations are followed. We also recommend management ensure all required procurement documentation is maintained in conjunction with its document retention policy. Management's Response: NGA management agrees with the finding and recommendations presented by Baker Tilly auditors and has developed a corrective action plan in response.
Federal Agency: United States Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Transportation, Department of Social Services, Department of Mental Health and Addiction Services, and Department of Developmental Services Pass-Through Numbers: 21DOT0015AA; 25SDRARG01TKC; 24ECD0504CAT; 24DDS0088RD Award Period: 07/01/2024-06/30/2025 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or specific requirement: Federal regulations require that the entity must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: During testing of procurement standards, the auditor noted there is no procurement policy during the award period and in line with that, we noted that the conflict of interest policy of the entity does not include the essential elements as outlined in 2 CFR section 200.318. Questioned costs: None. Context: Through testing performed, it was identified that the entity does not have a procurement policy in place during the award period and that the conflict of interest policy policies do not include the essential elements as outlined in 2 CFR section 200.318. Cause: Management was unaware of the restrictive requirements of the procurement standards and was unaware that the conflict of interest policies did not contain required guidance. Effect: With the absence of a compliant policy, the entity is at risk for noncompliance as it relates to federal procurement. Repeat Finding: None. Recommendation: We recommend that management compose a procurement policy with the criteria as set out in 2 CFR sections 200.318 and 200.326. and review the conflict of interest policy and make necessary changes to comply with the criteria as set out in 2 CFR section 200.318. Views of responsible officials: Management agrees with the finding and will compose a procurement policy in line with compliance requirements and review and edit the conflict of interest policy to be in compliance.
2025-004 Improve Procurement Process for Child Nutrition Cluster Federal Agency: U.S. Department of Education Cluster/Program: Child Nutrition Cluster AL Number(s): 10.553/10.555/10.559/10.582 Award Year: 2025 Compliance Requirement: Procurement Type of Finding Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement Uniform Guidance (2 CFR § 200.318–200.320) requires recipients of federal funds to follow their own documented procurement procedures, which must conform to applicable federal and state laws and promote full and open competition. For small purchases, Uniform Guidance and School policy require obtaining price or rate quotations from an adequate number of qualified sources, which per School policies is at least three. Additionally, proper contract documentation must be maintained for vendor relationships. Condition and Context Of the three vendors tested for procurement transactions under the Child Nutrition Cluster program, sufficient support could not be provided for one small purchase selection. School policy requires at least three quotes for small purchases; however, only two quotes were consistently obtained from vendors throughout the year. Each month, only two vendors provided quotes and the lowest-priced vendor was selected to supply produce. Further, no contracts were in place with the vendor supplying the produce. Effect or Potential Effect Noncompliance with policies and procedures regarding required number of quotes and maintaining formal contracts with vendors increases the risk of noncompliance with federal procurement requirements, lack of competition, and unallowable costs. Questioned Costs Due to the condition noted above, we were unable to determine if costs of $241,737 charged to the grant were allowable. Cause The School Department did not implement adequate controls to ensure compliance with its procurement policy for obtaining sufficient quotes and did not formalize vendor relationships with contracts as required. Recommendation The School Department should strengthen its procurement controls by ensuring that the required number of quotes are obtained and documented for all small purchases, in compliance with School policy and Uniform Guidance. The School should also implement procedures to ensure that contracts are in place with all vendors providing goods and services to the program. Views of Responsible Official and Planned Corrective Action Management’s views and Corrective Action Plan are included at the end of this report after the summary Schedule of Prior Year Findings.
Written Policies and Procedures Related to Federal Awards - Condition: The Town does not have written policies and procedures to ensure compliance with federal award requirements. Specifically, written procedures are missing for: Allowability of Costs (2 CFR 200 Subpart E), Procurement Standards (2 CFR 200.318), Financial Management (2 CFR 200.302). Criteria: 2 CFR §200.303(a) requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the award in compliance with federal statutes, regulations, and the terms of the award. Cause of Condition: The organization lacked dedicated administrative staff or training to develop these documents, relying on informal processes.Effect: Without written policies, the Town cannot ensure that costs are consistently treated as allowable, reasonable, and allocable in accordance with federal requirements, potentially leading to questioned costs or disallowance. Recommendation: The Town should develop and formally adopt comprehensive, written, and up-to-date policies and procedures that explicitly address 2 CFR 200 requirements for procurement, allowable costs, and financial reporting. Views of Responsible Officials and Planned Corrective Actions: We will reach out to MTAS to help the Town write and implement a policy for the Federal Award Program.
Condition: The Organization did not have written procedures regarding federal cash management, allowability of costs pertaining to federal funds, procurement procedures, or written standards of conduct covering conflicts of interest and governing the performance of its employees engaged in the selection, award and administration of federal contracts. Neither did the Organization have evidence of verication that the providers of covered transactions were not suspended, debarred or otherwise excluded. Criteria: In accordance with 2 CFR Section 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, the Organization must have written procedures regarding federal cash management (Section 200.302(b)(6)), allowability of costs pertaining to federal funds (Section 200.302(b)(7)), procurement procedures (Section 200.318(a)), and written standards of conduct covering conflicts of interest and governing the performance of its employees engaged in the selection, award and administration of federal contracts (Section 200.318(c)(1)). In accordance with 2 CFR Section 180, OMB Guidelines to Agencies on Government-Wide Debarment and Suspension (Nonprocurement), the Organization must have verified that the provider of covered transactions is not suspended, debarred or otherwise excluded (Section 180.300). Effect: The Organization was not in compliance with procurement provisions in 2 CFR Section 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and 2 CFR Section 180, OMB Guidelines to Agencies on Government-Wide Debarment and Suspension (Nonprocurement). Cause: The Organization had no internal control structure in place to implement the procurement provisions of 2 CFR Section 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and 2 CFR Section 180, OMB Guidelines to Agencies on Government-Wide Debarment and Suspension (Nonprocurement). Recommendation: The Organization should create an internal control structure in place to implement the procurement provisions 2 CFR Section 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and 2 CFR Section 180, OMB Guidelines to Agencies on Government-Wide Debarment and Suspension (Nonprocurement), create required written procedures and adhere to them. Repeat Finding: No Views of Responsible Officials: Management of Challenger Learning Center of Northwest Indiana, Inc. acknowledges the findings identified in the audit and is in agreement with the condition as stated. We recognize that certain deficiencies were identified related to donor-restricted grants, and federal grant compliance requirements. As this was the Organization’s first experience managing federal funding, some compliance requirements were not fully understood at the time; however, all actions taken were in good faith and with the intent to appropriately steward funds. Management is committed to strengthening internal controls and ensuring full compliance moving forward. Corrective actions have already been initiated, including the liquidation of remaining federal funds in accordance with grant requirements and the development of formalized policies and procedures to address procurement, financial tracking, and documentation practices.
Federal agency: U.S. Small Business Administration Federal program name: Congressional Grants Inclusive Ventures Small Business Program Assistance listing number: 59.059 Pass-through agency: Anne Arundel County, Maryland Pass-through number: SBAHQ23I0140 Award Period: September 1,2023 through August 31, 2028 Compliance Requirement: Procurement and Suspension and Debarment Type of Findings: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Nonfederal entities must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. 2 CFR section 200.318 states the grant 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 sections 200.317 through 200.327. Compliance: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Corporation did not follow their written procurement procedures which reflect applicable State, local, and tribal laws and regulations which also conform to the applicable federal law and standards identified in the Uniform Guidance. The Corporation could not provide documentation that it ensured contractors were not suspended or debarred before executing contracts with the entities. Questioned Costs Amounts paid to the two contractors for the fiscal year ended June 30, 2025 was $175,000. Context Supporting documentation for the procurement, suspension and debarment status for two of the two contractors selected for testing was not documented. Cause The Corporation has not historically received federal funding so the procurement, suspension and debarment documentation was not deemed necessary. Effect A lack of documented procurement standards for the Corporation could increase the risk of goods and services being procured through a method which is not in accordance with applicable State, local, and tribal law as well as federal regulations including the Uniform Guidance. If the suspension and debarment status is not verified when entering into covered transactions, it is possible that a subaward could be issued to an ineligible entity. Repeat Finding No Recommendation We recommend that management follow their written procurement policies and controls to ensure it maintains documentation of procurement, suspension and debarments checks and that the documentation is available for audit. Views of Responsible Officials Management agrees with finding. See corrective action plan for additional information.
Federal Agency: U.S. Department of Transportation and U.S. Treasury Federal Program Name: Research & Development and Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 20.000 and 21.027 Federal Award Identification Number and Year: 692Ml5-20-T-00029-2025 and SLFRP4646-2025 Pass-Through Agency: Iowa State University Pass-Through Number: 692M15-20-T-00029 PASS THRU 023063C Award Period: July 1, 2024 to June 30, 2025 Type of Finding: - Significant Deficiency in Internal Control over Compliance - Other Matters Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.318(i), the recipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: Oklahoma State University Stillwater (OSU STW) and Oklahoma State University Center for Health Sciences (OSU CHS) did not go through procurement procedures prior to entering into a contract with the vendor. Questioned costs: None. Context: During our testing of the Research & Development Cluster, we identified 1 transaction from OSU STW out of 40 transactions that did not go through the proper procurement procedures. During our testing of the Coronavirus State and Local Fiscal Recovery Funds Program, we identified 1 transaction from OSU CHS out of 6 transactions that did not go through the proper procurement procedures. Cause: OSU STW and OSU CHS did not have an effective control in place to ensure that the purchases went through the procurement procedures. Effect: OSU STW and OSU CHS were not in compliance with the regulation to go through the procurement procedures prior to entering a contract. Repeat Finding: No Recommendation: We recommend that OSU STW and OSU CHS review policies and procedures for procurement to ensure that every applicable transaction is going through the proper procurement procedures. Views of responsible officials: Management agrees with the finding and has developed a plan to correct the finding.
Finding Number: 2025‐001 Repeat Finding: No Program Name/Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Agency: Department of Treasury Federal Award Number: WCG2023‐‐00008 Pass‐Through Agency: Water Infrastructure Finance Authority of Arizona Questioned Costs: N/A Type of Finding: Significant Deficiency Compliance Requirement: Procurement and Suspension and Debarment 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 §§200.318 through 200.326. Subrecipients 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 §§200.214 requires that vendors are checked to ensure they are not suspended or debarred from receiving federal funds. Condition The District did not follow Federal and State regulations governing procurement. Cause The District did not have policies and procedures in place to verify a vendor was not suspended or debarred. Effect The District was not in compliance with Federal and State regulations governing procurement. Context The sample was not intended to be, and was not, a statistically valid sample. For two vendors reviewed for suspension and debarment check requirements, the District did not maintain verification that the vendor was not suspended or debarred. Upon review of the vendors, neither were suspended or debarred. Recommendation The District should implement policies and procedures over procurement, specifically suspension and debarment, to ensure goods and services are procured through vendors who are not suspended or debarred, so that federal monies exceeding the formal procurement threshold are used appropriately. Views of Responsible Officials See Corrective Action Plan.
Finding 2025-002: Procurement - Significant Deficiency. Program name: Substance Abuse and Mental Health Services Projects of Regional and National Significance. Assistance Listing: 93.243. Federal award number: 45CBB04530. Federal award year: 7/1/2024 - 6/30/2025. Federal awarding agency: U.S. Department of Health and Human Services. Criteria - 2 CFR §200.318 requires written procurement procedures and awarding contracts only to responsible contractors, with sufficient procurement documentation. Condition - NAMI Chicago’s procurement controls were not designed or operating effectively. The procurement policy does not fully comply with Uniform Guidance. Cause - Management has not fully updated procurement policies or implemented consistent controls over vendor eligibility verification and contract authorization. Effect - There is an increased risk of noncompliance with federal procurement requirements, including contracting with ineligible vendors or entering into unauthorized agreements, which could result in questioned or disallowed costs. Questioned costs - None identified. Identification of Repeat Findings - No. Recommendation - Management should update the procurement policy to align with Uniform Guidance. Management response - See corrective action plan.
Finding 2025-001 Internal control deficiency and noncompliance over procurement and suspension and debarment. Identification of the federal program: Assistance Listing Number 93.493: • Congressional Directives • U.S. Department of Health and Human Services • Federal award identification number – CE146487 • Federal award year – 7/1/2024 – 6/30/2025 • Pass-through entity – The Board of Regents of the University of Oklahoma Health Sciences Center • Pass-through entity identifying numbers: H79FG000747 and H79FG001034 Criteria or specific requirement (including statutory, regulatory, or other citation): Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 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). Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 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; (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders; (c) (1) the non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318, General procurement standards: (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. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.319, Competition: (a) All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and 200.320. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.320, Methods of procurement to be followed: 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: (a) (2) Small purchases – (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity; (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate –(1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price; (2) Proposals. A procurement method in which either a fixed price or cost-reimbursement type contract is awarded. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.320, Methods of procurement to be followed: (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 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. Title 2, Subtitle A, Chapter II, Part 200, Subpart C 200.214, Suspension and debarment: Non-Federal entities are subject to the non-procurement debarment and suspension regulations that 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. Title 2, Subtitle A, Chapter I, Part 180, Subpart C 180.300: What must I do before I enter into a covered transaction with another person at the next lower tier? When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by (a) checking SAM Exclusions; (b) Collecting a certification from that person; or (c) adding a clause or condition to the covered transaction with that person. Condition: During our testing over procurement, we observed management did not have documented procurement procedures that conformed to the procurement standards identified in 2 CFR section 200.318 to 200.327 and written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. Management did not have internal controls in place over procurements to ensure price or rate quotations were obtained from an adequate number of qualified sources, formal procurements to ensure sealed bids or proposals were obtained through public advertising, and completion of a cost or price analysis in connection with all procurement actions exceeding the simplified acquisition threshold. Management did not maintain records for procurements to document the history of 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, during our testing over suspension and debarment, we observed management did not retain support for internal control documentation for all vendors, evidencing that the vendors were searched for suspension and debarment upon entering into a contract supported with federal funds. Cause: Management did not have internal controls in place over the compliance requirements as stated in the criteria or specific requirement section above. Effect or potential effect: Procurements were not supported by internal controls and could potentially include unreasonable prices or rates. In addition, if a search for suspension and debarment is not conducted, the entity could contract with vendors that are suspended or debarred. Questioned costs: $1,385,165 – Assistance Listing Number 93.493 Federal award identification number – CE146487 Pass-through entity identifying numbers: H79FG000747 and H79FG001034 Questioned costs were computed as all procurements selected for testing. Questioned costs for each award are as follows: • CE146487: $60,874 • H79FG000747: $119,479 • H79FG001034: $1,204,812 Questioned costs means an amount, expended or received from a Federal award, that (1) is noncompliant or suspected noncompliant with Federal statutes, regulations, or the terms and conditions of the Federal award or (2) at the time of the audit, lacked adequate documentation to support compliance. Context: During our testing over procurements, we selected five vendors for testing with total expenditures of $1,385,165 from a population of procurements totaling $1,425,361, subject to formal procurement procedures. We observed management did not have internal controls in place to ensure the compliance requirements as stated in the criteria or specific requirement section above were performed for any of the five procurements selected for testing. For suspension and debarment, we selected five vendors for testing totaling $1,385,165. Management was unable to provide documentation that internal controls were executed for any of the vendors selected for testing. Identification as a repeat finding, if applicable: No. Recommendation: Management should create documented procurement procedures that conform to the procurement standards identified in 2 CFR section 200.318 through 200.327 and written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. Management should develop and implement internal controls over procurements to ensure price or rate quotations are obtained from an adequate number of qualified sources, formal procurements to ensure sealed bids or proposals are obtained through public advertising, and completion of a cost or price analysis in connection with all procurement actions exceeding the simplified acquisition threshold. Management should maintain records for procurements to document the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Management should create documented suspension and debarment procedures and develop and implement internal controls to ensure vendors were searched for suspension and debarment at the time of awarding a contract supported by federal funding and retain evidence supporting such procedures. Management should review the procurements identified as questioned costs to identify if any improper payments were made to the entity. Views of responsible officials: We agree with the finding that internal controls were not sufficient to maintain compliance with federal procurement standards under Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318 to 200.327 for a non-federal entity. However, the funds were expended for the intended purpose of the federal award. The Company is committed to implementing internal controls to ensure procurement related to federal awards follow 2 CFR section 200.318 to 200.327. The Company will update the procurement policy to ensure it complies with the requirements of 2 CFR section 200.318 through 200.327, which includes the written standards of conduct covering conflicts of interest, governing the actions of its employees who select, award, and administer procurement contracts. This policy will include procedures to ensure proper procurement for purchases to ensure sufficient price quotations are obtained from the required number of qualified sources, proper sealed bids or proposals are obtained through public advertising, an appropriate cost or price analysis is performed for procurement actions exceeding the simplified acquisition threshold, documentation is retained, and proper oversight is exercised to demonstrate compliance with 2 CFR section 200.318 through 200.327.
Federal Agency: U.S. Department of the Treasury; U.S. Department of Homeland Security Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds; Assistance to Firefighters Grant Assistance Listing Number: 21.027; 97.044 Federal Award Identification Number and Year: SLFRP0136-2021, EMW-2021-FG-00409 Pass-through Agency: State of Rhode Island's Pandemic Recovery Office (CSLFRF) Award Period: 3/3/21- 12/31/26, 2/28/23 - 2/27/25 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Repeat Finding: No Criteria or specific requirement The Town must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Condition The Town's purchasing policies do not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs None Context Although the Town's purchasing policies do not include all elements as outlined in 2CFR sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 7 of 7 procurement transactions tested. Cause The Town's has not updated its purchasing policy to fully incorporate all procurement requirements under Uniform Guidance. Effect The Town is at risk for noncompliance with Federal grants as it relates to procurement. Recommendation We recommend that the Town updates its procurement policy to include all elements identified in 2 CFR sections 200.303 and 200.318 through 200.326. Views of Responsible Officials Management agrees with this finding.
U.S. Department of Treasury Pass-through Entity: Mecklenburg County, North Carolina Program Name: Coronavirus State and Local Fiscal Recovery Funds Federal Assistance Listing Number: 21.027 Significant Deficiency and Nonmaterial Noncompliance – Procurement Finding 2025-006 – Repeat Finding Criteria: Per Sections 200.318 – 200.327 of the Uniform Grant Guidance, a non-federal entity must have and use documented procurement procedures, consistent with Uniform Grant Guidance Title 2 CFR Section 200.318 for the acquisition of property or services required under a Federal award or subaward. Furthermore, a contract award must not be made to a suspended or debarred party listed on the System for Award Management. Condition: There was one (1) contract out of two (2) contracts tested where Roof Above did not retain documentation demonstrating that the bid was publicly advertised as required under Uniform Grant Guidance procurement standards. Additionally, Roof Above did not perform or retain documentation evidencing verification that the vendor was not suspended or debarred on the System for Award Management (SAM.gov) prior to procuring services. Questioned Costs: None of the nonmaterial noncompliance items resulted in questioned costs. Effect: By not having sufficient documentation, the Organization may not be able to evidence compliance with Uniform Grant Guidance and could have improperly contracted with a vendor. Cause: The Organization did not have formalized procedures in place to ensure procurement requirements under Uniform Grant Guidance were consistently documented and reviewed, including public advertisement of bids and verification of vendor suspension or debarment status, prior to entering into contracts. Recommendation: The Organization should consider implementing a procurement policy in line with Uniform Grant Guidance and ensure proper documentation of the procurement process for all vendors utilized with federal funding. Views of Management: Management agrees with the finding and is implementing procedures to correct this which are further discussed in the Corrective Action Plan. See Corrective Action Plan for more information.
Finding 2025-001 – Material Weakness AL No: 20.205 Highway Planning and Construction Federal Grantor: U.S. Department of Transportation, Federal Highway Administration (FHWA) Passed-through: California Department of Transportation (Caltrans) and the Sacramento Area Council of Governments (SACOG) Passed-through Grantor’s No’s.: SPIL-6085 (091) for Caltrans and #240023 for SACOG. Compliance Requirement: Procurement, Suspension and Debarment Criteria: 2 CFR Part 200, Subpart E (Uniform Guidance) Section 200.318(a) states that the “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 Sections 200.317 through 200.327.” The contract should have conformed to the following sections in the Caltrans Local Assistance Procedures Manual (LAPM): - Section 10.1 provides requirements for federally funded architectural and engineering (A&E) contracts. - Section 10.3 provides requirements for non-A&E contracts. - Section 10.1.9 states that the local public agency (LPA) must “obtain Caltrans approval on the Exhibit 12- F: Cost Effectiveness/Public Interest Finding/A&E Noncompetitive and retain all documents in the project files” for procurements by noncompetitive proposals. - Section 9.7.2 states that the LPA must have a Disadvantaged Business Enterprise (DBE) goal set, and “must have an Exhibit 9-D: DBE Contract Goal Methodology submitted to the” District Local Assistance Engineer (DLAE). “LPAs may not advertise the contract before receiving DLAE feedback on the DBE goal.” Condition: Caltrans notified the Authority that two Next-Generation Facility Project (the Project) consulting contracts were procured in compliance the Federal Transit Administration’s (FTA’s) procurement guidelines but did not conform with the State of California LAPM. Caltrans indicated that the AECOM A&E consultant contract procurement did not comply with Sections 10.01 and 10.1.9 of the LAPM, including not including a Public Interest Finding for the sole source procurement of the agreement, and the LeFlore Group, LLC non-A&E consultant contract procurement did not comply with Section 10.3 of the LAPM. In addition, a Disadvantaged Business Enterprise goal was not requested nor completed as part of the advertisement for the project, which was required under Section 9.7.2 of the Caltrans LAPM. Effect: The Authority was not in compliance with the Caltrans LAPM and as a result, the Authority was required to halt work and repay Caltrans and SACOG for funds already reimbursed to the Project of $300,000 under AL 20.205. Cause: Caltrans and SACOG are both pass-through agencies for this grant, with the Authority being the final subrecipient. SACOG was not aware that the procurement requirements under this grant follow U.S. Department of Transportation, Federal Highway Administration requirements that differ from U.S. Department of Transportation, Federal Transit Administration requirements, which are administered by a different Caltrans department. As a result, the additional requirements in the LAPM were not communicated to the Authority and the Authority was not aware of the requirements and failed to comply with the LAPM. Context: The Authority submitted the procurement to the Caltrans Federal Transit Administration Programs Procurement Oversight Branch for approval prior to contracting with the consultants and the procurement was approved. However, the grant was provided through the Federal Highway Administration (FHWA) and Caltrans has a different oversight Branch for FHWA funded projects, which was not made clear to the Authority by either passthrough agency. AL 20.205 was originally reported on the SEFA and was selected for testing a major program as it was a high-risk Type B program under which the Authority incurred $300,000 of grant expenses and received the grant proceeds prior to June 30, 2025. Caltrans issued a sanction letter on December 9, 2025, which required the grant funds to be returned to Caltrans. As a result, the Authority removed the expenses from the SEFA, but the program is reported as a major program to report the procurement finding on the schedule of findings and questioned costs. - Questioned Costs: $300,000 Recommendation: We recommend the Authority add additional language to its Procurement Policy documenting the requirement to follow Section 10 of the LAPM and the criteria under which it applies when grants are received from the FHWA. Management’s Response: Management’s response is included in the attached Corrective Action Plan. Report on Internal Control over Compliance See finding 2025-001 above, which is also considered to be an internal control over compliance finding in the Major Federal Awards Program Audit.
U.S. Department of Treasury Passed through the Colorado Department of Human Services Federal Financial Assistance Listing 21.027 Award 24 IBEH 18932 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Material Non-Compliance Criteria: Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. This includes the requirements of a procurement policy and the processes that are to be followed when entering into contracts subject to procurement, suspension, and debarment. Condition: In our testing of procurement, suspension and debarment it was identified that the Organization did not have a written policy on procurement that satisfied the requirements of 2 CFR sections 200.318 through 200.326 implemented at the beginning of the fiscal year. In addition, there was no formal review of vendors to ensure they are not suspended or debarred prior to entering into transactions. Cause: Identification of the specific requirements under the Uniform Guidance and applicable CFR sections was made during the prior year audit, which occurred during fiscal year 2025. This resulted in a period of time in the fiscal year in which transactions were entered into without a compliant policy. Effect: Due to the timing of the implementation of a compliant policy, a material contract was entered into without following procurement, suspension, and debarment processes as required by Uniform Guidance. Questioned Costs: $292,562 Context/Sampling: One contract was identified as subject to procurement, suspension, and debarment requirements. That one contract was selected for testing. Repeat Finding from Prior Year: Yes, prior year findings 2024-03 and 2024-04. Recommendation: We recommend that management continuously review the now implemented policy to ensure it is in compliance with Uniform Guidance and being implemented throughout the Organization for all levels of transactions.
Section III - Findings and Questioned Costs - Major Federal Award Program Audit Finding Reference Number: 2025-001 Title and Assistance Listing Number of Federal Program: Economic Development Initiative, Community_x0004_ Project Funding, and Miscellaneous Grants - 14.251 Type of Finding: Federal Award Finding Finding Resolution Status: In Process Information on Universe Population Size: N/A Sample Size Information: N/A Identification of Repeat Finding and Finding Reference Number: Not a repeat finding Criteria: Under 2 CFR 200.318(a), non-federal entities must establish and maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. As required under 2 CFR Subpart D (§§200.317–200.327), organizations must follow written procurement procedures that reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards in the Uniform Guidance. Statement of Condition: United Playaz, Inc. and Subsidiary (the "Organization") does not have a documented procurement policy that complies with the procurement standards in 2 CFR 200.317–200.327. The Organization has purchasing policies, but no written procedures addressing required elements such as procurement methods, competition, conflicts of interest, domestic preferences, price/cost analysis, or contractor oversight. Cause: The absence of a compliant procurement policy appears to stem from insufficient familiarity with the detailed procurement requirements in the Uniform Guidance, as this was their first award and audit under these standards. Management utilized other local government procurement policies to perform their procurement procedures. Effect or Potential Effect: While no procurement errors were identified during the audit and no questioned costs resulted from this condition, the lack of required written procedures increases the risk of: -Noncompliance with Federal procurement standards -Inadequate competition and pricing documentation -Increased susceptibility to conflict of interest risks -Potential future questioned costs or disallowed expenditures Failure to maintain documented procedures also impairs the organization’s ability to demonstrate compliance to Federal agencies and pass through entities. Auditor Non-Compliance Code: S - Internal control deficiencies Questioned Costs: $- Reportable Views of Responsible Officials: While United Playaz did not have their own policy compliant with federal standards, the organization has historically used procurement guidelines as required by the San Francisco Mayor’s Office of Housing and Community Development (MOHCD) which complies to the Federal standards and guidelines administered and approved by HUD. In addition, the general contractor procurement process was completed prior to the initiation and receipt of the HUD award. _x0004__x0004_Management acknowledges that, while procurement activities were performed using established external guidelines, the Organization did not have a formally adopted written procurement policy that fully complies with the requirements of 2 CFR 200.317–200.327 at the time of the audit. Management has since identified this gap and is in the process of developing a compliant written procurement policy. Context: For procurement processes, the Organization has historically utilized procurement guidelines required by the San Francisco Mayor’s Office of Housing and Community Development and other applicable local government procurement frameworks. In addition, the general contractor procurement process was completed prior to the initiation and receipt of the federal award. Recommendations: 1. Develop and formally adopt a written procurement policy that complies with 2 CFR 200.317–200.327 addressing at minimum: -Procurement methods and applicable dollar thresholds -Full and open competition requirements -Standards of conduct and conflicts of interest -Price or cost analysis (200.324) -Domestic preference (200.322) -Use of small/minority owned businesses (200.321) -Required contract provisions (200.327) 2. Train staff involved in procurement to ensure consistent understanding and implementation. 3. Periodically review and update the policy to remain compliant as Federal requirements evolve Auditors’ Summary of the Auditee’s Comments on the Findings and Recommendations: Response Indicator: Agree Completion Date: 6/30/2026 Response: The Organization is in the process of developing, and will formally adopt and implement, a written procurement policy that complies with the requirements of 2 CFR 200.317–200.327. The policy will address, at a minimum, procurement methods, competition requirements, standards of conduct and conflicts of interest, price or cost analysis, domestic preference requirements, and required contract provisions. In addition, management will provide formal training to personnel involved in procurement to ensure consistent application of the policy and ongoing compliance with Federal procurement standards.
Finding Reference: 2025-003 – I. Procurement, Suspension and Debarment Federal Program Information Federal Agencies: Department of Health and Human Services Department of Justice Awards: Assistance Listing 93.078 – Strengthening Emergency Care Delivery in the United States Healthcare System through Health Information and Promotion Assistance Listing 16.753 – Congressionally Recommended Awards Award Periods: September 30, 2023 – September 29, 2025 July 1, 2024 – September 30, 2026 Description: Incomplete Federal Requirements within Procurement Policies Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 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).” Part 200.320 Methods of procurement to be followed states the following: “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” regarding the methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Condition As part of our testing over the operating effectiveness of internal controls over the Procurement, Suspension and Debarment assertion for our major programs, we noted that the Corporation did not have a procurement policy that conforms to all applicable standards contained in the Uniform Guidance, when purchasing goods or services with the federal funds. Cause The Corporation did not comply and maintain a procurement policy that conforms to the provisions required by the Uniform Guidance upon receiving such federal funds related to their federal programs. Effect or potential effect Purchasing of goods and/or servicing with the major federal programs may not be in compliance with the Uniform Guidance. Questioned costs None. Identification of a repeat finding This is a repeat finding of Finding 2024-006. Context Management has not established a procurement policy in line with the applicable standards contained in the Uniform Guidance based on review of the existing policy and discussions with management, however, no other instances of noncompliance with procurement standards identified in 2 CFR part 200 were noted as the amount of purchases exceeding the micro-purchase threshold was not direct and material to these programs and therefore no further testing over procurement was performed. Recommendation The Corporation should update its procurement policy to include the provisions required by the Uniform Guidance for purchasing goods and/or services with federal funds. View of responsible officials There is no disagreement with the audit finding.
Federal Program: Maternal, Infant and Early Childhood Home Visiting Grant (including COVID-19) - ALN 93.870; Federal Award # 24853633; passed through Texas Department of Family and Protective Services; passed through Texas Health and Human Services Commission. State Programs: Texas Home Visiting (THV) Program Grant - Award # 24853633; direct funding from Texas Department of Family and Protective Services. Texas Home Visiting (THV) Program Grant - Award # 24853633; direct funding from Texas Health and Human Services Commission. Criteria: Uniform Guidance (2 CFR 200.318 - 200.327) and TxGMS (General Procurement Standards) requires non-federal entities to ensure procurements are conducted using appropriate methods based on dollar thresholds and retain supporting documentation, including an adequate number of quotations from qualified sources for simplified acquisitions (formerly small purchases). Condition /Context: During testing of procurement transactions, two instances were identified in which management incorrectly classified procurements as sole source without adequate justification in accordance with Uniform Guidance or TxGMS, as applicable. Additionally, in these two instances tested, management did not retain sufficient documentation of quotes to support that procurements were conducted in compliance with simplified acquisition requirements (formerly small purchase). Questioned Costs: None Effect: Noncompliance with procurement requirements of Uniform Guidance and TxGMS, which increases the risk that purchases were not conducted in a manner providing full and open competition and may result in disallowed costs or increased scrutiny from grantor agencies. Cause: The condition resulted from inadequate procurement controls, including a lack of formalized review procedures for determining and documenting appropriate procurement methods. This resulted in United Way ATX not retaining the required supporting documentation for competitive procurements. Recommendations: United Way ATX should strengthen procurement controls by performing supervisory review of procurement classification and supporting documentation prior to approval and payment. In addition, management should implement standardized documentation requirements, including identification of procurement methods used and retention of quotes or bids for applicable procurements.
NONCOMPLIANCE WITH PROCUREMENT AND SUSPENSION AND DEBARMENT REQUIREMENTS, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, ASSISTANCE LISTING No. 21.027, Direct Allocation, AM-23-0256, AM-23-0255, YEAR ENDED JUNE 30, 2025 Criteria: Per 2 CFR 200.214, non-Federal entities are subject to the non-procurement, debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The city did not comply with the procurement standards outlined in 2 CFR §200.318-§200.327, which require competitive procurement processes and verification that contractors are not suspended or debarred. Specifically, the city did not verify the eligibility of program recipients/participants/contractors through the System for Award Management (SAM) or equivalent documentation in order to verify that they were not suspended, debarred, or otherwise excluded from participation in the program. Cause: The city does not have procurement policies and procedures in place that allow it to comply with procurement standards outlined in the Uniform Guidance. Effect: Non-compliance with program terms and conditions. Questioned costs: None. Recommendation: Management should develop procedures that will provide reasonable assurance that procurement of goods and services are made in compliance with applicable federal regulations and other procurement requirements specific to a federal award or subaward, and that no subaward, contract, or agreement for purchase of goods or services is made with any suspended or debarred party. Views of responsible officials and planned corrective actions: The government agrees with this finding and will adhere to the attached corrective action plan.
2025-001 Improve Procurement Process Federal Agency: U.S. Department of Education Cluster/Program: Child Nutrition Cluster AL Number(s): 10.553/10.555 Award Year: 2025 Federal Agency: U.S. Department of Education Cluster/Program: Special Education Cluster AL Number(s): 84.027/84.173 Award Year: 2025 Compliance Requirement: Procurement Type of Finding - Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement Uniform Guidance (2 CFR § 200.318–200.320) requires recipients of federal funds to follow their own documented procurement procedures, which must conform to applicable federal and state laws and promote full and open competition. For large purchases, Uniform Guidance and Massachusetts General Law (MGL) require obtaining competitive proposal or sealed bids. Additionally, proper contract documentation must be maintained for vendor relationships. Condition and Context The primary vendor tested for procurement under the Child Nutrition Cluster program did not have a signed contract or proof of the competitive procurement process for fiscal year 2025. Further, the Special Education Cluster did not have quotes for vendors tested or recent sole source letters on file. Effect or Potential Effect Noncompliance with policies and procedures regarding required procurement practices with vendors increases the risk of noncompliance with federal procurement requirements, lack of competition, and unallowable costs. Questioned Costs: None. Cause The District did not implement adequate controls to ensure compliance with procurement policies for obtaining sufficient quotes or competitive bids and did not formalize vendor relationships with contracts as required. Recommendation The District should strengthen its procurement controls by ensuring that the Uniform Guidance and MGL procurement practices are followed. Views of Responsible Official and Planned Corrective Action Management’s views and Corrective Action Plan are included at the end of this report.
Material Weakness in Internal Control over Compliance and Material Noncompliance - Child Nutrition Cluster Criteria: Federal regulations require non-federal entities to follow specific procurement standards when making purchases with federal award funds: • 2 CFR 200.320 requires the use of specific procurement methods (micro-purchase, small purchase, sealed bids, competitive proposals, etc.) based on the value of the transaction. • 2 CFR 200.318 requires the District to maintain oversight that ensures contractors perform in accordance with terms, conditions, and specifications. • 2 CFR 200.319 requires full and open competition and prohibits practices that restrict competition. • 2 CFR 200.324 requires cost or price analysis for certain procurements. • 2 CFR 200.213 requires verification that contractors are not suspended or debarred Condition: During testing of procurement transactions charged to the Child Nutrition Cluster, we noted that the District did not consistently follow the federal procurement standards required by 2 CFR 200.318-327. Specifically: The District did not obtain the required number of price or rate quotations for purchases exceeding the micro-purchase threshold. • For procurements that exceeded the simplified acquisition threshold, the District did not maintain documentation supporting full and open competition. • In several cases, the District was unable to provide evidence that vendors were verified against the SAM.gov exclusion list prior to contract award. • Procurement files did not contain required elements such as cost/price analysis, written procurement method selection, or justification for sole-source procurements. The transactions identified totaled approximately $50,000, which represents a material portion of federal expenditures tested under this major program. Cause: The District did not employ adequate internal controls to ensure that all federally funded procurements consistently followed the federal procurement standards. Staff turnover and insufficient training regarding federal procurement requirements also contributed to the deficiencies. Recommendation: We recommend that the School District design and follow internal controls to ensure proper procurement procedures are followed to comply with Uniform Guidance standards. Effect: Failure to follow federal procurement requirements increases the risk of: • Noncompliance with the Uniform Guidance, • Potential favoritism or lack of competition, • Unallowable costs being charged to federal programs, and • Federal funds being used inefficiently or in a manner inconsistent with federal regulations. The nature and extent of the exceptions identified represent a material weakness in internal control and material noncompliance with procurement requirements. Views of Responsible Official and Planned Corrective Action: See corrective action plan included in this report package.
2025-005 – Procurement Federal program information: Funding agency: U.S. Department of Health and Human Services Title: All major programs Assistance listing numbers: 93.696, 93.912 Award year: 7/1/2024 – 6/30/2025 Criteria: According to 2 CFR Part 200.318 through 200.327, non-federal entities 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. SFRC’s P&P Manual requires two written quotes for purchases between $10,000 and $250,000. Purchases over $250,000 require advertisement in the local newspaper, bid opening/evaluation, and the Board of Directors shall approve purchases in excess of $250,000 prior to contract signing. Condition: For one vendor paid in excess of $10,000 during fiscal year 2025, no written quotes were obtained for the services. There was also no purchase order approved with this vendor and there is no evidence that the Board of Directors approved the purchase. The contract signed with this vendor exceeded $250,000, and there is also no evidence that the Board of Directors approved this contract. One additional vendor was also paid in excess of $10,000 during fiscal year 2025, and there were no written quotes were obtained for the goods purchased. Context: One of ten vendors tested under ALN 93.696 and two of ten vendors tested under ALN 93.912. Questioned Costs: None Cause: SFRC has not implemented the requirements of its P&P Manual over procurement. Effect: SFRC is not in compliance with its P&P Manual and SFRC could be paying more for goods and services than if bids/quotes had been obtained. Auditor’s Recommendation: SFRC should enforce internal control procedures to ensure that all purchases are made in a manner consistent with its P&P Manual. Management’s Response: Management reviewed existing accounting staffing structure, revised position descriptions, and have advertised to fill two of three open positions; Accounts Payable Specialist and Controller. Management feels with these revised position descriptions, more focus on accounting operations, procedures, and property and equipment management.
Finding 2025-003 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2025 Federal agency: United States Department of Agriculture Compliance Requirement: Procurement Questioned Costs: None Criteria: 2 CFR 200.318(a) requires nonfederal entities to have and use documented procurement procedures, consistent with federal, state, and local requirements, for the acquisition of property or services under a federal award. These procedures must ensure full and open competition and address conflicts of interest Condition and Context: The entity has not established or documented a formal procurement policy or procedures to guide the acquisition of goods and services. No written guidelines were provided during the review period. Cause: The absence of an established procurement policy appears to be due to a lack of prioritization or awareness of regulatory requirements regarding procurement governance. Effect: The lack of a procurement policy increases the risk of non-compliance with applicable procurement laws and guidelines, and reduced accountability and transparency in financial operations. Recommendation: The management should develop, approve, and implement a comprehensive procurement policy in accordance with applicable laws and best practices.
Finding 2025-001 – Procurement (Material Weakness) Repeat Finding: No Federal Agency – National Science Foundation; National Institute of Health Research and Development Cluster Social, Behavioral, and Economic Sciences – Passed through New York University: 47.075, Mathematical and Physical Sciences – Passed through Loyola University of Chicago: 47.049, Biological Sciences: 47.074, Allergy and Infectious Disease Research: 93.855 Federal Award Years: Year Ended May 31, 2025 Condition The College's procurement policy does not reflect all applicable state and local laws and federal regulations. For two out of three (67%) small purchase procurements, there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of purchase. 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 200.327. 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. In accordance with 2 CFR sections 200.319 and 200.320(f), price quotations should be obtained from an adequate number of qualified sources for procurements that meet the small purchase procurement threshold or require documentation in support of the rationale to limit competition in those cases where competition was limited. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure the College has a procurement policy that meets the all applicable state and local laws and regulations. Questioned Costs There were no questioned costs related to this finding. Cause The College does not have a procurement policy that follows the procurement standards set out at 2 CFR sections 200.318 through 200.327. Context Two out of three vendors tested. Expenditures totaled $100,553. Effect Lack of a documented procurement policy that meets applicable state and local laws and federal regulations can result in improper procurement of goods and services which can lead to loss of future funding. Recommendation We recommend the College implement a procurement policy that conforms to federal regulations. We also recommend that the College implement policies and procedures around documentation of noncompetitive bidding. Views of Responsible Officials We agree with this finding. See corrective action plan.
Finding 2025‐006 Procurement and Suspension and Debarment Information on the federal program: Federal awarding agency: United States Department of Education (ED) Federal program: School Safely National Activities, Assistance Listing No. 84.184X Award year: 2024‐2025 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.318 (i) General Procurement Standards states, “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.” Condition: The University did not maintain records for procurements sufficient to detail the history of the procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Cause: The University did not have effective internal controls and procedures in place to ensure the University maintained records for procurements sufficient to detail the history of the procurement, including the rationale for the method of procurement and other required elements. Effect or potential effect: The University did not comply with the general procurement standards per the Uniform Guidance to maintain sufficient detail of the history of the procurement, including the rationale of the method of procurement. The University also did not retain evidence of internal controls related to approval of procurements. The performance of internal controls, including approval documentation of the procurement, is necessary to ensure compliance with federal procurement requirements. Questioned costs: $167,398 – Questioned costs were calculated based on the amount of two procurements for which the history of the procurement, including the rationale of the procurement method, was not documented ($73,980 plus $93,418). Context: We issued a material weakness related to internal control over compliance with procurement requirements in the prior year. Based upon the implementation date for the corrective action of May 31, 2025, provided by management, the finding related to this internal control had not been remediated for the period under audit. As such, we did not test the operating effectiveness of this internal control and are issuing a material weakness consistent with the prior year finding. We selected and tested the two procurements in the population over $10,000 with expenditures totaling $167,398 for the year ended May 31, 2025 for the School Safely National Activities program. For these procurements of an occupational therapist contractor ($73,980) and another vendor for supplies and materials ($93,418), the University did not obtain quotes or document sole source justification or the history of the procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. We consider the expenditures related to these procurements to be questioned costs due to lack of supporting documentation for the procurement, as noted above. The University’s total School Safely National Activities program expenditures were $1,310,305 for the year ended May 31, 2025. Of this amount, $262,030 related to procurements of goods and services during the year, of which 2 procurements were over $10,000. Identification as a repeat finding, if applicable: Yes – 2024-004; 2023-004 Recommendation: The University should retain written documentation for procurements, documenting the history of the procurement prior to the procurement of goods or services 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. The University should also retain evidence of internal controls, including approval documentation of the procurement, performed prior to entering into procurements. Views of responsible officials: Management agrees with the finding and has developed a corrective action plan in which the University will document the methodology used to select sole source or preferred vendor procurements through completion of the Sole Source/Preferred Vendor Justification Form. The corrective action will be implemented by March 1, 2026.
Congressional Grants - Procurement: Information on Federal Program: U.S. Department of Housing and Urban Development Congressional Grant (Federal Assistance Listing Number 14.251). Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Statement of Condition: During our discussions with management, we noted that the Organization does not have documented procurement procedures in place. Statement of Cause: The Organization did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318. Statement of Effect: The Organization is not in compliance with 2 CFR Section 200.218. The Organization does not have documented procedures and is therefore not performing required procedures that would be standard for all purchases over a given threshold. Questioned Costs: None. Perspective Information: As part of the required procurement testing, inquiries are made of the Organization’s management as to any procurement policies that the Organization has. Recommendation: We recommend that the Organization review the requirements of 2 CFR Section 200.318 to develop procurement policies to be followed. Views of responsible officials and planned corrective actions: The Capital District YMCA will develop and implement a written procurement policy in accordance with CFR Section 200.318. We will have this in place by July 31, 2025.
Congressional Grants - Procurement: Information on Federal Program: U.S. Department of Housing and Urban Development Congressional Grant (Federal Assistance Listing Number 14.251). Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Statement of Condition: During our discussions with management, we noted that the Organization does not have documented procurement procedures in place. Statement of Cause: The Organization did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318. Statement of Effect: The Organization is not in compliance with 2 CFR Section 200.218. The Organization does not have documented procedures and is therefore not performing required procedures that would be standard for all purchases over a given threshold. Questioned Costs: None. Perspective Information: As part of the required procurement testing, inquiries are made of the Organization’s management as to any procurement policies that the Organization has. Recommendation: We recommend that the Organization review the requirements of 2 CFR Section 200.318 to develop procurement policies to be followed. Views of responsible officials and planned corrective actions: The Capital District YMCA will develop and implement a written procurement policy in accordance with CFR Section 200.318. We will have this in place by July 31, 2025.
2025-005 - Procurement Criteria: In accordance with 2 CFR Section 200.319(d), non-federal entities must have their own written policies for procurement transactions. The policy should incorporate all requirements within 2 CFR section 200.318 through 200.326 of the Uniform Guidance. Condition: As of March 31, 2025, the Township did not have their own written procurement policy as required by 2 CFR section 200.318 through 200.326 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Cause: The Township was unaware of the requirement. Effect: The Township is not in compliance with the procurement policy requirements identified in 2 CFR section 200.318 through 200.326 which could jeopardize federal funding. Questioned Costs: This finding does not result in questioned costs. Recommendation: The Township should create a procurement policy that meets all the requirements of 2 CFR section 200.318 through 200.326. View of Responsible Officials: Management is in agreement and will create a procurement policy that meets all the requirements of 2 CFR section 200.318 through 200.326.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Center Program Cluster Assistance Listing Number: 93.224/93.527 Federal Award Identification Number and Year: H80CS00758 / 2025 Award Period: April 1, 2024 to March 31, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance Criteria: Federal regulations (2 CFR §§ 200.212 and 200.318(h); 2 CFR § 180.300; 48 CFR § 52.209-6) require that entities entering into covered transactions with federal award recipients be verified as not debarred, suspended, or otherwise excluded from participation in federal programs. This verification must be performed annually and prior to entering into any transaction exceeding the applicable threshold. Condition: We identified one instance in which the agency did not perform timely suspension and debarment verification for a vendor prior to entering into a covered transaction. Questioned costs: None Context: The vendor in question had a long-standing relationship with the agency and was considered reputable by management. Due to this familiarity, verification procedures were not followed as required, resulting in a lapse in compliance. Cause: The agency relied on the vendors history and reputation, assuming compliance without conducting the required verification. Effect: The agencys failure to consistently perform timely suspension and debarment verifications resulted in noncompliance with federal procurement requirements. Although the vendor in question was ultimately eligible, without a reliable and documented verification process, the Agency risks unintentionally engaging with ineligible vendors in future transactions. Repeat Finding: No Recommendation: We recommend management implement suspension and debarment verification process for all covered vendors, regardless of their history or reputation, to ensure compliance with federal regulations. Views of the Responsible Officials and Planned Corrective Action: Management agrees with the finding and acknowledges that timely suspension and debarment verification was not consistently performed across all vendors. To address this deficiency, the agency is implementing a standardized process to ensure suspension and debarment checks are conducted prior to entering into any covered transaction, regardless of vendor history. This process will include documented verification steps, annual review protocols, and staff training to reinforce compliance with federal procurement regulations.
2025-002 - Lack of Written Federal Program Policies. Type: Material Weakness. Condition: The Village does not have documented policies and procedures specific to the administration of the Coronavirus State and Local Fiscal Recovery Funds program. This includes the absence of written guidance on key compliance areas such as payments, procurement, allowability of costs charged to federal programs, compensation, and travel costs under Uniform Guidance. Criteria: Per 2 CFR 200.303 and 200.331 of the Uniform Guidance, non-federal entities are required to establish and maintain effective internal controls and written policies to ensure compliance with federal statutes, regulations, and the terms and conditions of federal awards. These policies should be tailored to the specific requirements of each federal program. Cause: The entity has not developed formal written policies and procedures for the Coronavirus State and Local Fiscal Recovery Funds program, possibly due to reliance on informal practices or general administrative policies that do not address federal-specific requirements. Effect: Without documented policies, there is an increased risk of noncompliance with federal requirements, inconsistent program administration, and lack of accountability. This may result in questioned costs, audit findings, or potential repayment of federal funds. Recommendation: We recommend that the Village develop and implement written policies and procedures specific to the Coronavirus State and Local Fiscal Recovery Funds program. These should include: - Payments in accordance with §200.302 (6), - Procurement in accordance with §200.318, - Allowability of costs charged to federal programs in accordance with §200.302 (7), - Compensation in accordance with §200.430 and §200.431, - Travel costs in accordance with §200.474. Training should also be provided to staff responsible for administering the program to ensure consistent application of these policies. Views of Responsible Officials: Management acknowledges the auditor’s finding regarding the absence of formally documented federal program policies. We recognize the importance of maintaining written procedures to ensure consistent compliance with Uniform Guidance requirements and to strengthen internal controls over federal awards. While informal practices have historically guided our federal program administration, we agree that formalizing these policies will enhance transparency, accountability, and operational efficiency. Management is currently in the process of developing written policies covering key areas such as procurement, allowable costs, subrecipient monitoring, and cash management. We anticipate completing this documentation and implementing the policies by February 28, 2026. We are committed to continuous improvement and appreciate the auditor’s recommendations as part of our efforts to maintain strong compliance and stewardship of federal funds.
Federal Program: 93.493 – Congressional Directives, U.S. Department of Health and Human Services, FAIN CE152180 passed through the Health Resources & Services Administration Criteria or Specific Requirement: Procurement, Suspension & Debarment, 2 CFR 200.320 Condition: The Company paid funds to a vendor that qualified under sole source procurement requirements. In the vendor’s contract with the Company, the vendor confirmed it was not suspended or debarred. The Company did not document its process for determining sole source procurement or document its search to confirm the vendor was not suspended or debarred. Cause: The Company does not have policies in place that comply with federal procurement, suspension and debarment requirements. Effect: The Company’s internal controls did not ensure proper documentation that the vendor materially complied with the federal procurement requirements. Questioned Costs: None Context: Federal procurement standards require entities that receive federal awards to have specific policies that comply with 2 CFR Section 200.318-320. The requirements specify that policies must establish thresholds and procedures for micro-purchases, simplified acquisitions, and formal purchases. When vendors are selected, federal funds are prohibited from going to certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in federal awards (2 CFR 200.214). The Company did not have policies in place to ensure compliance with these federal procurement guidelines. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: The Company has policies for vendor qualification in place surrounding critical vendors. We recommend considering all vendors that are awarded contracts to be paid with federal awards critical or otherwise amending the Company’s contracting review process or critical vendor policy to incorporate specific procedures when federal funds are used. These procedures should include a documented search of Sam.gov for suspension and debarment of the vendor. The Company should establish procurement thresholds and specific procedures for those thresholds as outlined in 2 CFR Section 200.318-320. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding. See attached corrective action plan.
2025-003 - Lack of Written Federal Program Policies. Type: Material Weakness. Condition: The Village does not have documented policies and procedures specific to the administration of the Water and Waste Disposal for Rural Communities program. This includes the absence of written guidance on key compliance areas such as procurement, subrecipient monitoring, allowable costs, and reporting requirements under Uniform Guidance. Criteria: Per 2 CFR 200.303 and 200.331 of the Uniform Guidance, non-federal entities are required to establish and maintain effective internal controls and written policies to ensure compliance with federal statutes, regulations, and the terms and conditions of federal awards. These policies should be tailored to the specific requirements of each federal program. Cause: The entity has not developed formal written policies and procedures for the Water and Waste Disposal for Rural Communities program, possibly due to reliance on informal practices or general administrative policies that do not address federal-specific requirements. Effect: Without documented policies, there is an increased risk of noncompliance with federal requirements, inconsistent program administration, and lack of accountability. This may result in questioned costs, audit findings, or potential repayment of federal funds. Questioned Costs: n/a. Recommendation: We recommend that the Village develop and implement written policies and procedures specific to the Water and Waste Disposal Systems for Rural communities program. These should include: - Procurement standards in accordance with 2 CFR 200.318 – 200.327. - Subrecipient monitoring protocols. - Guidelines for allowable costs and cost principles. - Reporting and recordkeeping requirements. - Internal control procedures to ensure compliance. Training should also be provided to staff responsible for administering the program to ensure consistent application of these policies. Views of Responsible Officials: Management acknowledges the auditor’s finding regarding the absence of formally documented federal program policies. We recognize the importance of maintaining written procedures to ensure consistent compliance with Uniform Guidance requirements and to strengthen internal controls over federal awards. While informal practices have historically guided our federal program administration, we agree that formalizing these policies will enhance transparency, accountability, and operational efficiency. Management is currently in the process of developing written policies covering key areas such as procurement, allowable costs, subrecipient monitoring, and cash management. We anticipate completing this documentation and implementing the policies by February 28, 2026. We are committed to continuous improvement and appreciate the auditor’s recommendations as part of our efforts to maintain strong compliance and stewardship of federal funds.
2024-005 Assistance Listing Number 66.468 Drinking Water State Revolving Fund United States Environmental Protection Agency North Dakota Public Finance Authority Procurement Suspension & Debarment 2 CFR Part 200.318 Criteria 2 CFR Part 200.318 states that a non-Federal entity must have and use documented procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR part 200.317 through 200.327. Condition District does not have a written procurement policy in place. Cause The District has not approved a written procurement policy. Effect Non-compliance with Procurement Suspension & Debarment compliance requirements. Questioned Costs Not Applicable Repeat Finding See 2023-005. Recommendation We recommend for the board of the District to create and implement a procurement policy that adheres to state and local regulations as well as 2 CFR Part 200.317 through 200.327. Views of Responsible Officials and Planned Corrective Actions The District will create and approve a procurement policy that adheres to state and local regulations as well as 2 CFR Part 200.317 through 200.327.
Finding 2024-003: Significant Deficiency - Internal Control Over Procurement, Suspension and Debarment Program Water and Waste Disposal Systems for Rural Communities Federal Agency U.S. Department of Agriculture Assistance Listing Number 10.760 Repeat of Prior Year Finding 2023-003 Criteria: For federal awards after January 1, 2018, guidance provided in 2 CFR part 200.318 requires nonfederal entities to establish and follow their own documented procurement procedures that conform to applicable federal law and standards. 2 CFR part 200.320 includes different allowable methods of procurement. There are also requirements to verify the vendors are not suspended or debarred. Condition/Context: During our testing for this program in the prior year, we noted that the City did not have a written procurement policy to conform with Uniform Guidance requirements. The City contracted with a third-party administrator who provided the services related to procurement for this grant program. No additional contracts were procured with federal funds in 2024. Cause: The City was made aware of the requirement of requiring a procurement policy but has not implemented a policy at this time. Effect: Without an adequate policy in place, procurement procedures may not adhere to requirements of federal awards. Questioned Costs: None noted. Recommendation: Program personnel should become familiar with the procurement, suspension and debarment rules for Federal programs and implement a formal written policy to conform with Uniform Guidance requirements. Views of Responsible Officials: Management agrees with the finding and will make efforts to implement a formal procurement policy.
Environmental Protection Agency, passed through State of North Dakota Department of Environmental Quality Federal Financial Assistance Listing #66.468 Capitalization Grants for Drinking Water Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Criteria - Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition - During the course of our engagement, it was identified that the District did not have a written policy on procurement that satisfied the requirements of 2 CFR sections 200.318 through 200.326. Cause - Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with all of these requirements. Effect - A lack of documented policies increase the overall risk that employees are not aware of the specific requirements with of procurement, suspension, and debarment. Questioned Costs – None reported Context/Sampling - Overall procurement policy. Repeat Finding from Prior Year(s) – Yes, prior year finding 2023-006 Recommendation - We recommend that management establish a written policy that addresses all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.326 and maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. Views of Responsible Officials - There is no disagreement with the audit finding.
to align with the requirements of 2 CFR 200.318 and are expecting to be a low-risk auditee during the 2025 fiscal year.
Criteria or Specific Requirement Procurement: Part 2 CFR Section 200.318 requires that recipients and subrecipients maintain and use documented procedures for procurement transactions under federal awards and subawards, including for acquisition of property or services. It also requires that recipients and subrecipients 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 type. Suspension and Debarment: Part 2 CFR Section 180.300 describes federal requirements related to suspension and debarment for federal award recipients. The standards require that a federal award recipient verify that an entity with which it plans to enter into a covered transaction is not suspended and debarred. Procedures for satisfying such requirements should be documented, and evidence of such procedures should be maintained. Condition Procurement: The Organization has a documented procurement policy. However, we were unable to view records detailing the history of the Organization’s two procurement transactions and that steps required by the Organization’s procurement were completed for the transactions. Suspension and Debarment: We were unable to see evidence that the Organization verified two vendors with which it entered a covered transaction were not suspended and debarred before the date it entered the transaction with such vendors. During our audit procedures, we noted that the vendors were not suspended and debarred.Questioned Costs: None Context: Procurement: Two instances were noted during testing of eight transactions above the Organization’s micro purchase threshold. Suspension and Debarment: Two instances were noted during testing of two coveredtransactions. Cause: We were unable to view evidence that the Organization's documented procurement, and suspension and debarment policies were followed. Effect: The Organization is not in compliance with federal requirements related to documented procurement, and suspension and debarment procedures. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization document and maintain evidence of: its completion of the required steps of its procurement policy for applicable transactions, and suspension and debarment checks and procedures the Organization performs over vendors.Documentation and evidence of these procedures should be maintained to help show that the Organization in compliance with requirements specified in the Uniform Guidance. Views of responsible officials: Management partially agrees with this finding. Regarding suspension and debarment, CLS agrees on improving the documentation to comply and demonstrate compliance with this requirement, though CLS disagrees with the characterization of material weakness. Regarding the two procurement transactions, CLS disagrees strongly that these transactions were procurements subject to the CLS accounting manual procurement section. CLS provided documentation to the auditors demonstrating that these were not procurements but were, in fact, required by existing leases. In one instance, our Denver landlord required us to pay a “catch-up” payment for operating expenses it had underbilled us previously; this cannot conceivably have been a procurement as we did not have discretion not to pay it and it was required by an existing lease. The second instance was a payment related to the expansion of leased office space in Colorado Springs; that also was not a procurement as there was no alternative but to pay the existing landlord for increased space, and it could not conceivably have been conducive to third-party bidding etc. We understand that the auditors may prefer to have a sole source letter in these instances, but we disagree with any finding that this is required by our accounting manual and the auditors have pointed to no specific language in the accounting manual for this requirement. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. Part 2 CFR Section 200.318 requires that recipients and subrecipients maintain and use documented procedures for procurement transactions under federal awards and subawards, including for acquisition of property or services. It also requires that recipients and subrecipients 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 type. We were unable to see evidence of the federally required documentation. The Organization’s accounting manual states that leases of office buildings and office storage space and contracted services are considered procurements.
Criteria or Specific Requirement Procurement: Part 2 CFR Section 200.318 requires that recipients and subrecipients maintain and use documented procedures for procurement transactions under federal awards and subawards, including for acquisition of property or services. It also requires that recipients and subrecipients 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 type. Suspension and Debarment: Part 2 CFR Section 180.300 describes federal requirements related to suspension and debarment for federal award recipients. The standards require that a federal award recipient verify that an entity with which it plans to enter into a covered transaction is not suspended and debarred. Procedures for satisfying such requirements should be documented, and evidence of such procedures should be maintained. Condition Procurement: The Organization has a documented procurement policy. However, we were unable to view records detailing the history of the Organization’s two procurement transactions and that steps required by the Organization’s procurement were completed for the transactions. Suspension and Debarment: We were unable to see evidence that the Organization verified two vendors with which it entered a covered transaction were not suspended and debarred before the date it entered the transaction with such vendors. During our audit procedures, we noted that the vendors were not suspended and debarred.Questioned Costs: None Context: Procurement: Two instances were noted during testing of eight transactions above the Organization’s micro purchase threshold. Suspension and Debarment: Two instances were noted during testing of two coveredtransactions. Cause: We were unable to view evidence that the Organization's documented procurement, and suspension and debarment policies were followed. Effect: The Organization is not in compliance with federal requirements related to documented procurement, and suspension and debarment procedures. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization document and maintain evidence of: its completion of the required steps of its procurement policy for applicable transactions, and suspension and debarment checks and procedures the Organization performs over vendors.Documentation and evidence of these procedures should be maintained to help show that the Organization in compliance with requirements specified in the Uniform Guidance. Views of responsible officials: Management partially agrees with this finding. Regarding suspension and debarment, CLS agrees on improving the documentation to comply and demonstrate compliance with this requirement, though CLS disagrees with the characterization of material weakness. Regarding the two procurement transactions, CLS disagrees strongly that these transactions were procurements subject to the CLS accounting manual procurement section. CLS provided documentation to the auditors demonstrating that these were not procurements but were, in fact, required by existing leases. In one instance, our Denver landlord required us to pay a “catch-up” payment for operating expenses it had underbilled us previously; this cannot conceivably have been a procurement as we did not have discretion not to pay it and it was required by an existing lease. The second instance was a payment related to the expansion of leased office space in Colorado Springs; that also was not a procurement as there was no alternative but to pay the existing landlord for increased space, and it could not conceivably have been conducive to third-party bidding etc. We understand that the auditors may prefer to have a sole source letter in these instances, but we disagree with any finding that this is required by our accounting manual and the auditors have pointed to no specific language in the accounting manual for this requirement. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. Part 2 CFR Section 200.318 requires that recipients and subrecipients maintain and use documented procedures for procurement transactions under federal awards and subawards, including for acquisition of property or services. It also requires that recipients and subrecipients 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 type. We were unable to see evidence of the federally required documentation. The Organization’s accounting manual states that leases of office buildings and office storage space and contracted services are considered procurements.
Criteria or Specific Requirement Procurement: Part 2 CFR Section 200.318 requires that recipients and subrecipients maintain and use documented procedures for procurement transactions under federal awards and subawards, including for acquisition of property or services. It also requires that recipients and subrecipients 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 type. Suspension and Debarment: Part 2 CFR Section 180.300 describes federal requirements related to suspension and debarment for federal award recipients. The standards require that a federal award recipient verify that an entity with which it plans to enter into a covered transaction is not suspended and debarred. Procedures for satisfying such requirements should be documented, and evidence of such procedures should be maintained. Condition Procurement: The Organization has a documented procurement policy. However, we were unable to view records detailing the history of the Organization’s two procurement transactions and that steps required by the Organization’s procurement were completed for the transactions. Suspension and Debarment: We were unable to see evidence that the Organization verified two vendors with which it entered a covered transaction were not suspended and debarred before the date it entered the transaction with such vendors. During our audit procedures, we noted that the vendors were not suspended and debarred.Questioned Costs: None Context: Procurement: Two instances were noted during testing of eight transactions above the Organization’s micro purchase threshold. Suspension and Debarment: Two instances were noted during testing of two coveredtransactions. Cause: We were unable to view evidence that the Organization's documented procurement, and suspension and debarment policies were followed. Effect: The Organization is not in compliance with federal requirements related to documented procurement, and suspension and debarment procedures. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization document and maintain evidence of: its completion of the required steps of its procurement policy for applicable transactions, and suspension and debarment checks and procedures the Organization performs over vendors.Documentation and evidence of these procedures should be maintained to help show that the Organization in compliance with requirements specified in the Uniform Guidance. Views of responsible officials: Management partially agrees with this finding. Regarding suspension and debarment, CLS agrees on improving the documentation to comply and demonstrate compliance with this requirement, though CLS disagrees with the characterization of material weakness. Regarding the two procurement transactions, CLS disagrees strongly that these transactions were procurements subject to the CLS accounting manual procurement section. CLS provided documentation to the auditors demonstrating that these were not procurements but were, in fact, required by existing leases. In one instance, our Denver landlord required us to pay a “catch-up” payment for operating expenses it had underbilled us previously; this cannot conceivably have been a procurement as we did not have discretion not to pay it and it was required by an existing lease. The second instance was a payment related to the expansion of leased office space in Colorado Springs; that also was not a procurement as there was no alternative but to pay the existing landlord for increased space, and it could not conceivably have been conducive to third-party bidding etc. We understand that the auditors may prefer to have a sole source letter in these instances, but we disagree with any finding that this is required by our accounting manual and the auditors have pointed to no specific language in the accounting manual for this requirement. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. Part 2 CFR Section 200.318 requires that recipients and subrecipients maintain and use documented procedures for procurement transactions under federal awards and subawards, including for acquisition of property or services. It also requires that recipients and subrecipients 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 type. We were unable to see evidence of the federally required documentation. The Organization’s accounting manual states that leases of office buildings and office storage space and contracted services are considered procurements.
Criteria or Specific Requirement Procurement: Part 2 CFR Section 200.318 requires that recipients and subrecipients maintain and use documented procedures for procurement transactions under federal awards and subawards, including for acquisition of property or services. It also requires that recipients and subrecipients 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 type. Suspension and Debarment: Part 2 CFR Section 180.300 describes federal requirements related to suspension and debarment for federal award recipients. The standards require that a federal award recipient verify that an entity with which it plans to enter into a covered transaction is not suspended and debarred. Procedures for satisfying such requirements should be documented, and evidence of such procedures should be maintained. Condition Procurement: The Organization has a documented procurement policy. However, we were unable to view records detailing the history of the Organization’s two procurement transactions and that steps required by the Organization’s procurement were completed for the transactions. Suspension and Debarment: We were unable to see evidence that the Organization verified two vendors with which it entered a covered transaction were not suspended and debarred before the date it entered the transaction with such vendors. During our audit procedures, we noted that the vendors were not suspended and debarred.Questioned Costs: None Context: Procurement: Two instances were noted during testing of eight transactions above the Organization’s micro purchase threshold. Suspension and Debarment: Two instances were noted during testing of two coveredtransactions. Cause: We were unable to view evidence that the Organization's documented procurement, and suspension and debarment policies were followed. Effect: The Organization is not in compliance with federal requirements related to documented procurement, and suspension and debarment procedures. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization document and maintain evidence of: its completion of the required steps of its procurement policy for applicable transactions, and suspension and debarment checks and procedures the Organization performs over vendors.Documentation and evidence of these procedures should be maintained to help show that the Organization in compliance with requirements specified in the Uniform Guidance. Views of responsible officials: Management partially agrees with this finding. Regarding suspension and debarment, CLS agrees on improving the documentation to comply and demonstrate compliance with this requirement, though CLS disagrees with the characterization of material weakness. Regarding the two procurement transactions, CLS disagrees strongly that these transactions were procurements subject to the CLS accounting manual procurement section. CLS provided documentation to the auditors demonstrating that these were not procurements but were, in fact, required by existing leases. In one instance, our Denver landlord required us to pay a “catch-up” payment for operating expenses it had underbilled us previously; this cannot conceivably have been a procurement as we did not have discretion not to pay it and it was required by an existing lease. The second instance was a payment related to the expansion of leased office space in Colorado Springs; that also was not a procurement as there was no alternative but to pay the existing landlord for increased space, and it could not conceivably have been conducive to third-party bidding etc. We understand that the auditors may prefer to have a sole source letter in these instances, but we disagree with any finding that this is required by our accounting manual and the auditors have pointed to no specific language in the accounting manual for this requirement. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. Part 2 CFR Section 200.318 requires that recipients and subrecipients maintain and use documented procedures for procurement transactions under federal awards and subawards, including for acquisition of property or services. It also requires that recipients and subrecipients 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 type. We were unable to see evidence of the federally required documentation. The Organization’s accounting manual states that leases of office buildings and office storage space and contracted services are considered procurements.
Procurement, Suspension and Debarment Federal agency: U.S. Department of Health and Human Services Program: Continuation of the National Evaluations System for Health Technology Coordinating Center Assistance listing number: 93.103 Federal award identification number and year: • 2U01FD006292-06 2024 • 3U01FD006292-06S1 2023 Criteria: 2 CFR 200.318 states non-federal entities must have and use documented procurement procedures that conform to 2 CFR 200.317 through 200.327. 2 CFR 200.214 states non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Order 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 200 requires adequate documentation of compliance with 2 CFR 200.214. Condition and context: The Organization established policies and procedures over suspension and debarment, including checking all vendors against the government suspension and debarment listing. The policies and procedures for suspension and debarment were being followed however the evidence of the search on sam.gov was not retained. A sample of five vendors with a total contract value of $8,528,526 was selected from a population of twelve. Cause: The Organization’s management did not retain evidence of compliance with the above criteria regarding suspension and debarment due to oversight. Effect: The Organization’s documentation was lacking evidence of tracking vendors for suspension and debarment. Questioned costs: None Repeat finding: No Recommendation: We recommend management updates its policies and procedures to ensure adequate supporting documentation of suspension and debarment verification is maintained. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Procurement, Suspension and Debarment Federal agency: U.S. Department of Health and Human Services Program: Continuation of the National Evaluations System for Health Technology Coordinating Center Assistance listing number: 93.103 Federal award identification number and year: • 2U01FD006292-06 2024 • 3U01FD006292-06S1 2023 Criteria: 2 CFR 200.318 states non-federal entities must have and use documented procurement procedures that conform to 2 CFR 200.317 through 200.327. 2 CFR 200.214 states non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Order 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 200 requires adequate documentation of compliance with 2 CFR 200.214. Condition and context: The Organization established policies and procedures over suspension and debarment, including checking all vendors against the government suspension and debarment listing. The policies and procedures for suspension and debarment were being followed however the evidence of the search on sam.gov was not retained. A sample of five vendors with a total contract value of $8,528,526 was selected from a population of twelve. Cause: The Organization’s management did not retain evidence of compliance with the above criteria regarding suspension and debarment due to oversight. Effect: The Organization’s documentation was lacking evidence of tracking vendors for suspension and debarment. Questioned costs: None Repeat finding: No Recommendation: We recommend management updates its policies and procedures to ensure adequate supporting documentation of suspension and debarment verification is maintained. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Criteria: The Foundation is responsible for implementing policies, including internal controls, that are designed to provide reasonable assurance regarding the achievement of the following objectives: effectiveness and efficiency of operations, reliability of reporting for internal and external use; and compliance with applicable laws and regulations. Per 2 CFR 180.300 and 200.318-200.326, the Foundation is responsible for implementing policies and procedures before entering into covered transactions with vendors as well as performing competitive bidding procedures for vendors used in federal award spending. Condition: The overall process for tracking federal funds spent and the reimbursement process is a manual process performed by one department. For majority of the year the Foundation lacked formal policies for reimbursement, procurement and timely review of calculations throughout the year. Cause: The Foundation saw increased levels of federal funding during the previous year and did not have the process in place to ensure compliance until majority of the way through the year. Effect: The lack of process documentation and review process limited the Foundation’s ability to design and implement the necessary internal controls over compliance with federal awards. Questioned Costs: Indeterminable. Context: The finding represents a systematic deficiency in the Foundation’s process surrounding federal funds. This finding cannot be quantified in terms of dollar value. Repeat Finding: This is partially a repeat finding as the Foundation implemented the required policies during the year ended December 31, 2024. Recommendation: We recommend increased training in federal grant compliance and specific grant requirements. Additionally, the Foundation should continue to review and implement formal processes surrounding federal funds and the review of reimbursement requests. Views of Responsible Officials: Management concurs with the finding and implemented a comprehensive procurement policy in October 2024 compliant with federal regulations under the Uniform Guidance (2 CFR Part 200), with full staff training completed and internal monitoring controls established.
2024-001: Internal Controls over Compliance for Procurement Suspension & Debarment U.S. DEPARTMENT OF TREASURY COVID-19 Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027 Criteria: Per 2 CFR sections 200.318 through 200.327, [entities] 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. Further, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The City did not follow its Grant Standard Operating procedures for validating that a contractor was not suspended or debarred or otherwise excluded from participating in the transaction. Cause: The contract agreement was finalized without validation that all proper procurement procedures had been followed. Effect: By not following the City’s procedures in place, it puts the City at risk of doing business with companies who are suspended, debarred or otherwise excluded from doing business with the federal government. Questioned Costs: $0 Context: The auditor tested one procurement transaction entered into during 2024 using COVID- 19 Coronavirus State and Local Fiscal Recovery Funds. The City’s Grant Standard Operating procedures over suspension and debarment were not followed for this one procurement. Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend the City perform a separate individual check of contract files to ensure the City’s Grant Standard Operating procedures are followed and documented prior to entering into a contract agreement with covered contractors. Views of Responsible Officials and Planned Corrective Actions: Management agrees with this finding and is in the process of developing internal controls to ensure timely and appropriate actions are taken on the deficiency noted. Additional details can be found in the City of Bloomington’s Corrective Action Plan.
2024-003: Lack of Procurement Policy – Significant Deficiency AL 66.468 Base Capitalization Grants for Drinking Water State Revolving Funds Criteria 2 CFR Part 200.318 states that a non-Federal entity must have and use documented procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR part 200.317 through 200.327. Condition The City does not have a written procurement policy in place. Cause The City has not written and approved a procurement policy. Effect Non-compliance with Procurement Suspension & Debarment compliance requirements. Questioned Costs $0 Recommendation We recommend for the City to create and implement a procurement policy that adheres to state and local regulations as well as 2 CFR Part 200.317 through 200.327. Views of Responsible Officials A procurement policy will be developed and approved by the City Council. Repeat Finding This is a new finding.
2024-003 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury 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 Organization has a procurement policy in place; however, the Organization neglected to document their suspension and debarment verification process for one of four procurement transactions tested. The Organization is also required by the Washington State Department of Agriculture ("WSDA") to receive prior approval for any equipment purchase or equipment repairs over $5,000. One of the four transactions tested did not receive prior approval from WSDA to make the purchase. There was no documentation that could support approval was received from WSDA after the purchase had been made. Cause The Organization claimed the suspension and debarment check occurred prior to entering into the transaction but neglected to retain documentation. The Organization also did not properly follow its procurement policy, nor the policy required by WSDA, requiring prior approval for any equipment purchase or repair over $5,000. Effect Payments may have been made to suspended or debarred vendors and gone undetected by the Organization. The Organization could have also made an equipment purchase or equipment repair that would not be refunded by WSDA (the pass-through entity). Repeat Finding No. Auditor's Recommendation The Organization should ensure the employee responsible for conducting a suspension and debarment check is (1) aware of the necessity to document the verification was done and (2) capable of documenting the verification. The Organization should also reevaluate its internal controls over procurements with WSDA funding to ensure that the Organization is receiving approval from the WSDA prior to making the purchase. Employees tasked responsible for making procurement transactions should be educated on the proper procurement procedures. Management should be checking for the WSDA approval prior to signing off on cash disbursements for equipment purchases or equipment repairs.
2024-003 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury 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 Organization has a procurement policy in place; however, the Organization neglected to document their suspension and debarment verification process for one of four procurement transactions tested. The Organization is also required by the Washington State Department of Agriculture ("WSDA") to receive prior approval for any equipment purchase or equipment repairs over $5,000. One of the four transactions tested did not receive prior approval from WSDA to make the purchase. There was no documentation that could support approval was received from WSDA after the purchase had been made. Cause The Organization claimed the suspension and debarment check occurred prior to entering into the transaction but neglected to retain documentation. The Organization also did not properly follow its procurement policy, nor the policy required by WSDA, requiring prior approval for any equipment purchase or repair over $5,000. Effect Payments may have been made to suspended or debarred vendors and gone undetected by the Organization. The Organization could have also made an equipment purchase or equipment repair that would not be refunded by WSDA (the pass-through entity). Repeat Finding No. Auditor's Recommendation The Organization should ensure the employee responsible for conducting a suspension and debarment check is (1) aware of the necessity to document the verification was done and (2) capable of documenting the verification. The Organization should also reevaluate its internal controls over procurements with WSDA funding to ensure that the Organization is receiving approval from the WSDA prior to making the purchase. Employees tasked responsible for making procurement transactions should be educated on the proper procurement procedures. Management should be checking for the WSDA approval prior to signing off on cash disbursements for equipment purchases or equipment repairs.
2024-003 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury 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 Organization has a procurement policy in place; however, the Organization neglected to document their suspension and debarment verification process for one of four procurement transactions tested. The Organization is also required by the Washington State Department of Agriculture ("WSDA") to receive prior approval for any equipment purchase or equipment repairs over $5,000. One of the four transactions tested did not receive prior approval from WSDA to make the purchase. There was no documentation that could support approval was received from WSDA after the purchase had been made. Cause The Organization claimed the suspension and debarment check occurred prior to entering into the transaction but neglected to retain documentation. The Organization also did not properly follow its procurement policy, nor the policy required by WSDA, requiring prior approval for any equipment purchase or repair over $5,000. Effect Payments may have been made to suspended or debarred vendors and gone undetected by the Organization. The Organization could have also made an equipment purchase or equipment repair that would not be refunded by WSDA (the pass-through entity). Repeat Finding No. Auditor's Recommendation The Organization should ensure the employee responsible for conducting a suspension and debarment check is (1) aware of the necessity to document the verification was done and (2) capable of documenting the verification. The Organization should also reevaluate its internal controls over procurements with WSDA funding to ensure that the Organization is receiving approval from the WSDA prior to making the purchase. Employees tasked responsible for making procurement transactions should be educated on the proper procurement procedures. Management should be checking for the WSDA approval prior to signing off on cash disbursements for equipment purchases or equipment repairs.
2024-003 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury 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 Organization has a procurement policy in place; however, the Organization neglected to document their suspension and debarment verification process for one of four procurement transactions tested. The Organization is also required by the Washington State Department of Agriculture ("WSDA") to receive prior approval for any equipment purchase or equipment repairs over $5,000. One of the four transactions tested did not receive prior approval from WSDA to make the purchase. There was no documentation that could support approval was received from WSDA after the purchase had been made. Cause The Organization claimed the suspension and debarment check occurred prior to entering into the transaction but neglected to retain documentation. The Organization also did not properly follow its procurement policy, nor the policy required by WSDA, requiring prior approval for any equipment purchase or repair over $5,000. Effect Payments may have been made to suspended or debarred vendors and gone undetected by the Organization. The Organization could have also made an equipment purchase or equipment repair that would not be refunded by WSDA (the pass-through entity). Repeat Finding No. Auditor's Recommendation The Organization should ensure the employee responsible for conducting a suspension and debarment check is (1) aware of the necessity to document the verification was done and (2) capable of documenting the verification. The Organization should also reevaluate its internal controls over procurements with WSDA funding to ensure that the Organization is receiving approval from the WSDA prior to making the purchase. Employees tasked responsible for making procurement transactions should be educated on the proper procurement procedures. Management should be checking for the WSDA approval prior to signing off on cash disbursements for equipment purchases or equipment repairs.
2024-003 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury 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 Organization has a procurement policy in place; however, the Organization neglected to document their suspension and debarment verification process for one of four procurement transactions tested. The Organization is also required by the Washington State Department of Agriculture ("WSDA") to receive prior approval for any equipment purchase or equipment repairs over $5,000. One of the four transactions tested did not receive prior approval from WSDA to make the purchase. There was no documentation that could support approval was received from WSDA after the purchase had been made. Cause The Organization claimed the suspension and debarment check occurred prior to entering into the transaction but neglected to retain documentation. The Organization also did not properly follow its procurement policy, nor the policy required by WSDA, requiring prior approval for any equipment purchase or repair over $5,000. Effect Payments may have been made to suspended or debarred vendors and gone undetected by the Organization. The Organization could have also made an equipment purchase or equipment repair that would not be refunded by WSDA (the pass-through entity). Repeat Finding No. Auditor's Recommendation The Organization should ensure the employee responsible for conducting a suspension and debarment check is (1) aware of the necessity to document the verification was done and (2) capable of documenting the verification. The Organization should also reevaluate its internal controls over procurements with WSDA funding to ensure that the Organization is receiving approval from the WSDA prior to making the purchase. Employees tasked responsible for making procurement transactions should be educated on the proper procurement procedures. Management should be checking for the WSDA approval prior to signing off on cash disbursements for equipment purchases or equipment repairs.