Finding Text
Federal Agency: U.S. Department of Treasury
Federal Program Name: Congressional Appropriations Program, Public Law '118.420
Assistance Listing Number: 21.U01 NeighborWorks System Program FY 2024 Appropriation
Type of Finding: Significant Deficiency in Internal Control over Compliance and
Other Matters
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The Corporation should have internal controls designed to ensure compliance with those provisions.
In addition, 2 CFR Part 200.320(c) states that there are specific circumstances in which the recipient may use a noncompetitive procurement method. The noncompetitive procurement method may only be used if one of the following circumstances applies:
(1) The aggregate amount of the procurement transaction does not exceed the micro-purchase;
(2) The procurement transaction can only be fulfilled by a single source;
(3) The public exigency or emergency for the requirement will not permit a delay resulting from providing public notice of a competitive solicitation;
(4) The recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity provides written approval; or
(5) After soliciting several sources, competition is determined inadequate.
Condition: During our testing, we noted two procurement samples were procured by way of a noncompetitive proposal process through a solicitation from only one source that did not meet the circumstances of 2 CFR Part 200.320(c). The sole source justifications that were documented in the procurement files for these two samples were not in compliance with the Uniform Guidance.
Questioned costs: Not determinable
Context: We selected samples from three populations of vendors who had federal expenses in fiscal year 2024 based on when the procurements were completed. The two exceptions were from the population of procurements completed prior to March 2023. These procurements were completed in February 2020 and July 2022, respectively. Total federal expenditures related to these procurements were $194,571 during fiscal year 2024 and the total award amounts were $1,035,000.
We did not identify exceptions in our testing of procurements completed March 2023 or after.
Cause: Prior to fiscal year 2024, at the time these procurements were performed, the Corporation’s procurement policy allowed sole source justifications that were not compliant with the Uniform Guidance.
Effect: The Corporation incurred federal expenses during fiscal year 2024 under procurements that did not comply with the requirements of the Uniform Guidance.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2023-001.
Recommendation: We recommend the Corporation ensure controls are in place so that expenses charged to federal programs are in compliance with the procurement requirements of the Uniform Guidance. As part of this, the Corporation should consider identifying active contracts that were improperly procured and determine actions to correct the noncompliance.
Views of responsible officials: There is no disagreement with the audit finding.