Finding Text
#2024-005 – Major Federal Award Finding – Reporting; Procurement and Suspension and Debarment Nature of Finding: Reporting and Procurement, Maintenance of Documentation/Records – Compliance Finding and Significant Deficiency in Internal Control over Compliance Criteria/Condition: Documentation was not maintained to support financial data provided in reports submitted to the funding source. Documentation was also not maintained to support certain procurement procedures. Per 2 CFR 200.334, financial records and supporting documentation must be maintained for three years from the date of the final financial report. Per 2 CFR 200.318(i), recipients must maintain records sufficient to detail the history of each procurement transaction, including (among other items) rationale for contractor selection or rejection. Cause/Context: The following activities did not have supporting documentation: • Expenditure balances reported to the State of Michigan in quarterly reports were not amended or reconciled to the final accounting records for each reporting period. The accounting periods were impacted by various transactions between the dates of the grant expenditure reports and the close of the respective period financial statement. • Performance of contractor/vendor suspension and debarment search on SAM.gov. Effect: Evidence to support a reconciliation between reports submitted to a funding source and the general ledger is not readily available. Evidence to support that the appropriate contractor/vendor vetting process was conducted is not available. Recommendation: The Organization should produce and maintain supporting documentation for all reports submitted to funding sources, including information to reconcile reports to the final financial statements for the respective period and resolution of any reporting differences with the funding agency. We also recommend that the Organization maintain all documentation to support the decision process associated with procurement. Views of Responsible Officials and Planned Corrective Actions: All procurement following the adoption of the procurement policy have been done in alignment with the policy. We also introduced procurement “kickoff meetings’ for new grants to review each budget line, determine the correct procurement method and plan documentation. All vendors now have debarment searches in their QuickBooks vendor information tab.