Finding Text
Finding 2024-002 – Procurement, Suspension and Debarment (Significant Deficiency)
U.S. Department of Health and Human Services
Substance Abuse and Mental Health Service Projects (93.243)
Federal Award Year: 2023-2024
Criteria and Context:
Institutions are required to adhere to specific requirements for procurement and suspension and debarment to ensure compliance with federal regulations. In accordance with 2 CFR Part 200, procurement processes must promote full and open competition, requiring institutions to maintain written policies, prevent conflicts of interest, and implement cost-effective purchasing methods.
When selecting vendors, institutions must assess qualifications, pricing, and past performance to ensure compliance. Contracts should clearly define expectations related to federal regulations. Additionally, before awarding contracts or subawards, institutions must confirm that vendors and subrecipients are not suspended or debarred from receiving federal funds, typically by verifying their status through SAM.gov.
Thorough documentation of procurement activities—including vendor selection, contract terms, and suspension and debarment verifications—is essential. Institutions must also conduct regular reviews of procurement practices to ensure compliance with federal guidelines and take corrective actions if noncompliance is identified. These measures help safeguard federal funds and ensure partnerships with eligible vendors and subrecipients.
Condition:
The University had not established formal procedures to verify the suspension or debarment status of vendors and subrecipients prior to issuing contracts or subawards.
Cause and Effect:
During the award period, management had personnel turnover, resulting in operational disruptions and a loss of institutional knowledge. Consequently, newly assigned staff were unfamiliar with established procedures for verifying the suspension or debarment status of vendors and subrecipients. The lack of structured knowledge transfer and training contributed to inconsistent compliance practices and increased the risk of noncompliance with federal eligibility requirements.
Questioned Costs:
None noted.
Identified as a Repeat Finding:
No
Recommendation:
The University should review and update its policies related to suspension and debarment to ensure compliance with federal requirements. Specifically, procedures should be implemented requiring personnel to verify the eligibility of all vendors and subrecipients by confirming their status through the System for Award Management (SAM.gov) prior to the execution of any federally funded contracts or subawards. This verification should be documented and retained as part of the procurement and subaward process.
Views of Responsible Officials:
Management agrees with the findings and recommendations. The University has implemented corrective actions to prevent recurrence by establishing procedures that assess the eligibility of all vendors and subrecipients, confirming their status through the System for Award Management (SAM.gov) before executing any federally funded contracts or subawards. These procedures have been incorporated into the University’s compliance checklist, which is reviewed monthly to ensure adherence.