Finding 1077488 (2023-002)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
$1
Year
2023
Accepted
2024-09-30
Audit: 323287
Organization: Native Village of Kivalina (AK)
Auditor: Brad Cage CPA

AI Summary

  • Core Issue: NVK failed to document procurement for purchases over $10K for two programs, violating federal procurement regulations.
  • Impacted Requirements: Must follow 2CFR, Section 200.320, which requires competitive bids and documentation of the selection process, including vendor checks.
  • Recommended Follow-Up: Management should reinforce procurement policies and ensure all staff understand the need for proper documentation, especially for sole source purchases; this is a repeat finding.

Finding Text

DURING MY AUDIT, I NOTED THAT THE NVK DID NOT PROPERLY DOCUMENT THE PROCUREMENT OF ONE PURCHASEE OVER 10K FOR THE DOT, COVID-19, CSLFR PROGRAM AND ONE PURCHASE OVER 10K FOR THE DENALI COMMISSION GRANT. PER 2CFR, SECTION 200.320 NVK'S STAFF MUST FOLLOW PROCUREMENT POLICIES AND OBTAIN COMPETITIVE BIDS FOR SIGNIFICANT PURCHASES OF EQUIPMENT/MATERIALS AND/OR CONTRACTS AND DOCUMENT THE FINAL SELECTION PROCESS, INCLUDING VENDORS CONTACTED, VARIOUS QUOTES/BIDS, AND FINAL ANALYSIS OF WINNING BID. IN ADDITION, THE SAM WEBSITE MUST BE REVIEWED TO ENSURE THE WINNING VENDOR/CONTRACTOR HAS NOT BEEN SUSPENDED/DEBARRED. THE PURCHASE WAS IN THE AMOUNT OF $40,031 FOR THE DOT, COVID-19, CSLFR PROGRAM AND $31,307 FOR THE DENALI COMMISSION GRANT. I TESTED THE ONLY ONE IN EXCESS OF THE PROCUREMENT THRESHOLD FOR THE DOT, COVID-19, CSLFR GRANT AND BOTH OF THE PURCHASES IN EXCESS FOR THE DENALI COMMISSION GRANT ONE OF ONE FOR THE DOT, COVID-19, CSLFR AND ONE OF TWO IN THE DENALI COMMISSION DID NOT CONTAIN PROPER PROCUREMENT. INTERNAL CONTROLS WERE NOT IN PLACE TO ENSURE THAT PRIOR TO PURCHASE, PROPER PROCUREMENT PROCEDURES WERE FOLLOWED AND/OR DOCUMENTED. MANAGEMENT SHOULD ENSURE THAT ALL STAFF KNOW THAT ALL MATERIAL PURCHASES MUST BE PROPERLY PROCURED, AND IF SOLE SOURCE, THAT MUST BE DOCUMENTED AS WELL. THIS WAS A REPEAT FINDING. THE FINDING WAS PREVIOUSLY REPORTED AS FINDING 2022-002

Categories

Questioned Costs Procurement, Suspension & Debarment

Other Findings in this Audit

  • 501045 2023-002
    Material Weakness Repeat
  • 501046 2023-002
    Material Weakness Repeat
  • 1077487 2023-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $659,607
90.100 Denali Commission Program $295,712
14.867 Indian Housing Block Grants $162,050
15.020 Aid to Tribal Governments $114,913
66.926 Indian Environmental General Assistance Program (gap) $78,724
15.156 Cooperative Landscape Conservation $46,051
21.029 Coronavirus Capital Projects Fund Program $32,042
21.032 Local Assistance and Tribal Consistency Fund $25,088
20.205 Highway Planning and Construction $13,120
15.037 Water Resources on Indian Lands $1,064