Finding Text
Type of Finding: Significant Deficiency in Internal Control over Compliance and Instance of Noncompliance Federal Agency: U.S. Department of Defense Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations Assistance Listing Number: 12.005 Federal Award Identification Number and Year: H79TI083313 - 2020 Award Period: September 28, 2020 through September 27, 2025 Criteria or specific requirement: 2 CFR 200.320 requires non-federal entities to have and use documented procurement procedures. 2 CFR 200.318(i) states that "the non-Federal entity must maintain a record sufficient to detail the history of procurement”. Condition: A formal procurement policy was not adopted until partway through FY24. One procurement lacked adequate documentation to support the history and reasoning behind the procurement. Questioned costs: $3,729 known questioned costs. Context: Internal procurement policies were updated to match UG requirements after FY23 audit procedures identified deficiencies. The new policies were adopted on April 8, 2024, and then amended further on August 1, 2024, which was approximately two months before the final audit report was issued. One of seven procurements tested lacked adequate supporting documentation to support the history and reasoning behind the procurement and one additional selected procurement did not have adequate evidence of internal controls to support the procurement. These procurements were both small purchases that were procured in February and March 2024, respectively, prior to the adoption of the final procurement policies. Cause: Prior to completing the prior year’s audit, staff were not aware of the specific compliance requirements and procedures for procurement. Effect: Purchases may occur that do not follow the procurement standards as required by Uniform Guidance and could lead to expenditure of federal funds that are not suitable or preferrable to the federal program. Repeat finding: The finding is a repeat of a finding immediately in the prior year. The prior year finding number was 2023-002. Recommendation: CLA recommends regular review of the Organization's procurement policies to ensure they continue to meet procurement standards, as set by Uniform Guidance, and they continue to be consistently implemented. CLA also recommends reviewing internal controls surrounding procurements to ensure they are sufficient to prevent noncompliance. Views of responsible officials: There is no disagreement with the audit finding.