Finding 1162107 (2025-002)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2025
Accepted
2025-11-07
Audit: 371906
Organization: Lake Forest College (IL)
Auditor: RSM US LLP

AI Summary

  • Core Issue: The College failed to document suspension and debarment checks for 100% of the vendors tested before contracting.
  • Impacted Requirements: Non-federal entities must not contract with suspended or debarred parties, as per federal regulations (2 CFR section 180.220 and 2 CFR 200.303).
  • Recommended Follow-Up: The College should enhance its processes to ensure proper documentation of suspension and debarment checks before vendor contracts are finalized.

Finding Text

Finding 2025-002 – Suspension and Debarment (Material Weakness) Repeat Finding: No Federal Agency – National Science Foundation; National Institute of Health Research and Development Cluster Biological Sciences: 47.074, Allergy and Infectious Disease Research: 93.855 Federal Award Years: Year Ended May 31, 2025 Condition For two out two vendors (100%) tested, the College did not provide sufficient documentation that a suspension and debarment check was performed prior to entering into a contract with the vendor. Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220 Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure suspension and debarment checks are performed and documented. Questioned Costs There were no questioned costs related to this finding. Cause The College did not have controls in place to reasonably ensure compliance with suspension and debarment requirements of the Uniform Guidance. Context Two out of two vendors tested. A subsequent check was confirmed that these vendors were not suspended or debarred. Effect If the College does not obtain documentation confirming a vendor for a procurement transaction was not suspended or debarred, the College could enter into a transaction with a suspended or debarred vendor causing unallowable costs and as a result represent noncompliance and result in a loss of federal funding. Recommendation We recommend the College review current processes for suspension and debarment to ensure that documentation is included to support the suspension and debarment check prior to entering into a contract with a vendor. Views of Responsible Officials We agree with this finding. See corrective action plan.

Corrective Action Plan

Finding 2025-002: Suspension and Debarment Finding: For two out of two vendors (100%) tested, the College did not provide sufficient documentation that a suspension and debarment check was performed prior to entering into a contract with the vendor. Cause: The College did not have controls in place to reasonably ensure compliance with suspension and debarment requirements of the Uniform Guidance. Corrective Actions Taken or Planned: As part of the procurement process review, a more robust policy will be developed related to vendor management. The policy will include specific definitions and limits for the types of transactions (non-procurement, procurement contracts, “covered transactions”). By October 31, 2025, the Business Office will communicate with all current PI’s an interim policy including the need for competitive bids, vendor screening, and more detailed descriptions. Contact Person Responsible: Doug MacKay, Controller Lake Forest College Completion Date: January 31, 2026

Categories

Procurement, Suspension & Debarment Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 1162100 2025-001
    Material Weakness Repeat
  • 1162101 2025-001
    Material Weakness Repeat
  • 1162102 2025-001
    Material Weakness Repeat
  • 1162103 2025-001
    Material Weakness Repeat
  • 1162104 2025-001
    Material Weakness Repeat
  • 1162105 2025-001
    Material Weakness Repeat
  • 1162106 2025-002
    Material Weakness Repeat
  • 1162108 2025-003
    Material Weakness Repeat
  • 1162109 2025-004
    Material Weakness Repeat
  • 1162110 2025-004
    Material Weakness Repeat
  • 1162111 2025-004
    Material Weakness Repeat
  • 1162112 2025-004
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.268 FEDERAL DIRECT STUDENT LOANS $7.89M
84.063 FEDERAL PELL GRANT PROGRAM $3.97M
84.038 FEDERAL PERKINS LOAN PROGRAM $570,085
84.007 FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS $477,510
84.033 FEDERAL WORK-STUDY PROGRAM $298,829
93.855 ALLERGY AND INFECTIOUS DISEASES RESEARCH $99,020
47.074 BIOLOGICAL SCIENCES $79,610
47.049 MATHEMATICAL AND PHYSICAL SCIENCES $16,799
47.075 SOCIAL, BEHAVIORAL, AND ECONOMIC SCIENCES $8,290
97.036 DISASTER GRANTS - PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) $-1,831