Finding Text
Noncompliance with Contract Provisions for Non-Federal Entity Contracts Under Federal Awards and Material Weakness in Internal Control over Procurement and Suspension and Debarment Assistance Listing Number: 10.561 Name of Federal Program or Cluster: State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (SNAP Cluster) Name of Federal Agency: Department of Agriculture Name of Pass-Through Entities: State of Wisconsin Department of Health Services passed through Dane County Procurement and Suspension and Debarment 2 CFR§200.201(a) requires a pass-through entity must decide on the appropriate type of agreement for a Federal award (for example, a grant, cooperative agreements, subaward, or contract). 2 CFR§200.327 contract provisions requires the recipients or subrecipient contracts must contain the applicable provisions described in Appendix II of the Uniform Guidance. Appendix II Part 200-Contract Provisions for Non-Federal Entity Contracts Under Federal Awards requires all contracts made by the non-Federal entity under the Federal award must contain the provisions listed in the section as applicable. 2 CFR§200.303 requires the Organization to establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Organization did not create a written contract with one of its contractors that contains the required contractual provisions listed in the criteria. In addition, the Organization’s internal controls over procurement did not prevent or detect noncompliance with the applicable requirements.Cause: The Organization has policies and procedures related to procurement in its fiscal procedures manual. However, management did not monitor to ensure that the applicable policies and procedures were being followed. Failure to enter into the required contracts that contain the applicable contractual provisions could lead the Organization to inappropriately disburse Federal Award funds to contractors. We recommend that Organization management monitor compliance with procurement procedures to ensure that the required contracting is occurring. No WRTP has reviewed the organization’s fiscal policy manual including all subsections regarding contractual provisions and procurement. Additional training has been provided and completed by management and staff. The fiscal policy manual procurement section will undergo further review by a third party and if recommended, will be updated and presented to the Finance Committee of the Board of Directors.