Finding Text
Criteria: Southwest Counseling Services must design internal controls to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Per review of 2 CFR 200.213, non-Federal entities are prohibited from contracting with, or making sub-awards under covered transactions to, parties that are suspended or debarred or whose principals are suspended or debarred. Covered transactions include contracts for goods and services awarded under a non-procurement transaction 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., sub-awards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215.
Condition/context: For one of the contracts selected for testing, we determined that the contractor did not have a suspension and debarment clause in the contract, and Southwest Counseling Services did not keep record of other verification procedures to document the subrecipient was not suspended or debarred. Independently, we verified that the contractor was not suspended or debarred.
Cause: Southwest Counseling Services does not have a control system in place to ensure required suspension and debarment is verified and documented.
Effect: Without processes and controls in place, it is possible that Southwest Counseling could contract with a contractor that is suspended or debarred.
Questioned costs: None.
Identification as a repeat finding: No
Recommendation: We recommend that Southwest Counseling Services implement processes and controls to ensure compliance with the suspension and debarment requirement.