Finding Text
Information on Federal Programs: 45.312 – The Institute of Museum and Library Services: National Leadership Grants. Criteria or Specific Requirements: According to 2 CFR §200.303, the non-Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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 COSO. Additionally, according to 2 CFR §200.320(c), 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 threshold (see paragraph (a)(1) of this section); 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 the testing of the procurement compliance requirement related to the major programs, it was determined that AAM used the noncompetitive procurement method without meeting any one of the criteria applicable for use of this method. Cause: Management did not have internal control procedures in place to ensure that procurement requirements were adequately followed, documented and retained when Federal awards were obtained. Effect: Failure to use documented procurement policies and procedures could have resulted in noncompliance with the Criteria or Specific Requirements section above. Perspective: While AAM did have documented procurement policies and procedures compliant with 2 CFR §200.320, AAM issued contracts under noncompetitive procurement method without meeting the applicable requirements for use of this method. Within a random sample of 10 procurement contracts, 4 were selected based on the noncompetitive method. Questioned Costs: Questioned costs were not identified. Repeat Finding: Not applicable. Recommendation: AAM should strengthen its internal controls for procurement of property or services required under a Federal award or subaward to ensure compliance with the Uniform Guidance