Finding Text
Finding 2023-002: Material Weakness - Internal Control Over Procurement, Suspension and Debarment
Program: COVID-19 State & Local Fiscal Recovery Funds
Grantor Agencies: U.S. Department of Treasury & WI Department of Health Services
Assistance Listing Number: 21.027
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, we noted that the Village did not have a written procurement policy to conform with Uniform Guidance requirements. There was not a system in place to track and document the procurement process and support the contracting decisions made. As a result, we were unable to verify if the Village followed the necessary federal procurement standards.
Cause: The Village was not aware that a written policy was required to be in place outside of the terms and condition in the grant agreement.
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. The Village should also create a system to track projects that were procured during the year to ensure they are in compliance with their policy.
Management response and Corrective Action Plan: Management agrees with the finding. A tracking procedure has been developed and a written procurement policy will be approved prior to the end of fiscal 2024 to further define procurement processes to align with Federal program standards and Village ordinance to address this deficiency.