Finding Text
Finding Number: 2023-002 – Contractor Monitoring Federal Agencies: United States Department of State Federal Programs: All programs under Assistance Listing Number 19.345 Assistance Listing Numbers: 19.345 Award Identification Number and Year: All awards under Assistance Listing Number 19.345 Criteria or Specific Requirement: Per 2 CFR §200.318(b), non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts. Effective monitoring includes evaluating the quality and timeliness of services and ensuring that contractors meet performance expectations and compliance requirements. Condition: CIPE did not have adequate internal controls in place to monitor the quality and efficiency of services provided by third-party contractors funded by Federal programs. Specifically, the absence of performance metrics, lack of regular reviews, or failure to verify compliance with contract terms. Cause: The lack of controls resulted from insufficient resources dedicated to contract management, lack of a formalized monitoring framework, and turnover in staff responsible for oversight. Effect or Potential Effect: Failure to monitor third-party performance increases the risk of substandard services, inefficiencies, and noncompliance with Federal program requirements. This could potentially lead to questioned costs and jeopardize program outcomes. Questioned Costs: None Context: This finding is considered systemic rather than isolated. The entity has not had prior findings related to contractor monitoring in recent years. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that CIPE: 1. Develop and implement a formalized monitoring framework to oversee third-party contractors, including the establishment of performance metrics and periodic evaluations. 2. Assign responsibility for monitoring to specific staff members and provide training to ensure consistent oversight practices. 3. Require regular reporting from contractors on progress and performance, and conduct periodic site visits or audits as appropriate.