Finding Text
Criteria or specific requirement – Procurement and Suspension and Debarment – (2 CFR
318 to 327, 2 CFR 180)
Condition - The University’s internal controls did not ensure that contracts entered into
with federal funds followed the procurement, suspension and debarment requirements.
Cause – The University’s policies did not ensure that costs for projects paid with federal
grant funds were not a cost plus percentage of profit or percentage of cost or that the
contractor was not suspended or debarred prior to entering into the contract.
Effect or potential effect – The University entered into a contract that was not in
accordance with the requirements of the Uniform Guidance.
Questioned costs - $223,526 calculated as the amount of the unallowed contract charged
to the grant.
Context – Out of the population of two contracts that were subject to procurement,
suspension and debarment, one contract was selected for testing. Our sampling
method was not, and was not intended to be, statistically valid. The price in the
contract was a percentage of cost. Additionally, there was no documentation ensuring
the contractor was not suspended or debarred.
Identification as a repeat finding, if applicable – Not applicable
Recommendation – The University should update their policies and controls to ensure
contracts entered into with federal funds meet the procurement, suspension and
debarment requirements.
Views of responsible officials and planned corrective actions – Management
acknowledges errors made in the procurement process related to contracting with the
architectural services vendor for the ARPA project. To address this, the University is in
the process of amending the contract to comply with 2 CFR requirements. Moving
forward, all federal construction projects will be bid and contracted using a fixed-cost
method. Additionally, the procurement process is being revised to include a vendor
review through SAM.gov prior to awarding contracts. This review will ensure that the
selected vendor is not suspended or debarred by the federal government at the time of
the award. University staff have attended multiple 2 CFR trainings hosted by the
Economic Development Administration and Maximus Higher Education. These sessions have been instrumental in equipping staff with the necessary knowledge to
manage future federally funded projects in compliance with regulations.