Finding Text
Identification of the Federal Program:
Grantor: U.S Department of Defense, U.S. Department of Health and Human Services
Program Name: Research and Development Cluster
Assistance Listing No. / FAIN / Pass-Through Entity (if applicable) / Pass-Through Entity Identifying Number (if applicable):
12.420 / W81XWH2110945 / Royal Institution for the Advancement of Learning / McGill University / PT89891
93.847 / RC2DK125960
93.847 / UC2DK126021 / MDI Biological Laboratory / UC2DK126021-04/ROGOSIN
93.847 / U01DK123786 / University of Washington / UWSC11731
Criteria or Specific Requirement:
In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “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.”
Condition:
Management was unable to provide evidence of a control being consistently performed throughout the audit period to address the risk that the Institute may enter into a covered transaction with an entity that is suspended, debarred, or otherwise excluded.
Cause:
Management has established a monthly suspension and debarment screening process for activities associated with the Institute’s Research and Development Cluster. However, the process was not designed effectively to ensure that all entities with which the Institute may enter into a covered transaction are included in the monthly screening process.
Effect or Potential Effect:
The lack of an effective control over suspension and debarment has the potential to result in noncompliance with the requirement.
Questioned Costs:
None.
Context:
The Institute assesses vendors upon initial entry into the Institute’s procurement system and performs a monthly screening of the vendors to determine if they are either suspended, debarred or otherwise excluded. The Institute utilizes a third-party service provider to perform the monthly screening of its vendors by providing a file of all vendors from the Institute’s procurement system. For the two months subject to our testing, upon receipt of the output report of screened vendors from the service provider, the Institute did not validate that its full list of vendors sent to the service provider was appropriately screened. For the two months tested, we noted that there were discrepancies between the Institute’s vendor list and the number of vendors screened. Additionally, from a sample of five vendors with activity associated with the Institute’s Research and Development Cluster drawn from our transactional tests of compliance, we noted that evidence of the monthly screening could not be provided for one vendor. In our further testing of compliance, we independently noted no suspended or debarred vendors.
Identification as a repeat finding:
This finding was reported as finding 2022-002 in the prior year.
Recommendation:
Management should further enhance the design of its control to ensure that all vendors and subrecipients associated with the Institute’s Research and Development Cluster are subject to the monthly suspension and debarment screening process by performing a monthly reconciliation of the vendor list submitted to the third-party service provider and the screening results output report provided by the service provider.
Views of Responsible Officials:
Management concurs with this audit finding and will continue to enhance the suspension and debarment review process and controls to meet the requirements of 2 CFR part 200.