Finding 1161059 (2024-003)

Criteria: Procurement - Non-profit entities must follow the procurement standards set out at 2 CFR part 200. Condition: Certain language required by 2 CFR Part 200 was not included in the Organization's approved policy. Additionally, there was no documentation of the history of procurement including the rationale for the method of procurement and the Organization's procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Cause: Due to no previous single audit requirements, procurement policies had not been reviewed to ensure they complied with requirements by 2 CFR Part 200. Additionally, documentation was not maintained on the procurement process along with following the required verification on debarrment and suspension. Effect: The Organization's procurement policy is not adequate and does not have adequate documentation to support rational for procurement method. Context: A sample of one disbursement totaling $119,381 was selected from a population of two transactions over the micro purchase threshold totaling $221,056 for the period March 26, 2024 - December 31, 2024. The disbursement selected for testing did not have documentation of the rationale for the method of procurement. Questioned costs: No known or likely questioned costs in excess of $25,000. Repeat Finding: No Recommendation: We recommend the Organization implement changes to its procurement policy to include all requirements of 2 CFR Part 200 and implement procedures to properly document procurement. Views of responsible officials of the auditee: The Organization concurs with the finding and will implement the following: Update its procurement policy so it complies with 2 CFR Part 200 Develop additional policies and procedures that require documentation for the method of procurement and the Organization's procedures for verifying its chosen vendor Distribute policies and procedures to all applicable finance and programmatic staff Train staff on the new policies and procedures