Finding Text
2023-003 Documented Procurement Policy
Federal Program - U.S. Department of the Treasury – Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027)
Federal Award Number - SLFRP0136
Compliance Requirement - Procurement, Suspension, and Debarment
Criteria - Per 2 C.F.R. § 200.318(a), non-federal entities must use documented procurement procedures that reflect applicable state and local laws and regulations and conform to applicable federal laws and the procurement standards identified in the Uniform Guidance, including those set forth in §§ 200.317 through 200.327.
Condition - During our audit, we noted that the Organization did not have a documented procurement policy in place that complies with the Uniform Guidance.
Cause - The Organization has historically had a low volume of procurement activity and has not formalized written procurement procedures.
Effect - Without a documented procurement policy, there is an increased risk that future procurements may not comply with applicable federal requirements, which could result in unallowable costs or other compliance issues.
Questioned Costs - None noted.
Context - This condition was identified during our testing of internal controls over compliance for the Procurement, Suspension, and Debarment requirement. Although the Organization did not enter into any contracts or purchases during the audit period that exceeded the micro-purchase threshold, the absence of a required policy represents a significant deficiency in internal control over compliance.
Recommendation - We recommend that the Organization develop and implement a written procurement policy that complies with 2 C.F.R. §§ 200.318–.327 and ensure that staff are trained on its provisions.
View of Responsible Officials - We agree with the finding. The organization lacked a formal procurement policy.