Finding Text
Procurement, Suspension and Debarment – Material Weakness in Internal Control Over Compliance and Material Non-Compliance Criteria: Non-federal entities are prohibited from contracting with or making sub-awards under covered transactions to parities that are suspended or debarred or whose principals are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to be equal or exceed $25,000 or meet certain other specified criteria. Additionally, the recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in §200.318 of the Uniform Guidance. Condition/Context: We selected a statistically valid random sample of transactions charged to the programs to tests controls of procurement, suspension and debarment and found the following: ALN 15.035: Forestry on Indian Lands • For 1 of 1 vendor tested that met the suspension and debarment threshold, the Tribes were unable to provide documentation indicating that a suspension and debarment check was conducted prior to contracting with the vendor. However, we were able to verify during the course of the audit that this vendor was not previously suspended or debarred. • For 1 of 1 vendor tested that met procurement requirements, the Tribes could not provide support that procurement policies were followed to obtain three or more bids or documentation to justify sole source prior to contracting with the vendor. ALN 21.027: COVID-19 Coronavirus State and Local Fiscal Recovery Fund • For 4 of 4 vendors tested that met the suspension and debarment threshold, the Tribes were unable to provide documentation indicating that a suspension and debarment check was conducted prior to contracting with the vendors. However, we were able to verify during the course of the audit that these vendors were not previously suspended or debarred. • For 3 of 4 vendors tested that met procurement requirements, the Tribes could not provide support that procurement policies were followed to obtain three or more bids or documentation to justify sole source prior to contracting with the vendors. Cause: The programs did not follow the Tribes’ procurement policy’s documentation requirements to obtain multiple bids or document sole source justification and obtain verification that a suspension and debarment check was conducted prior to contracting with the vendor. Effect: If vendors are retained and paid from federal funds and are later found to be suspended or debarred, or if it is determined that programs did not assure full and open competition, the Tribes could be subject to questioned costs or other sanctions from funding agencies. Questioned costs: The questioned costs associated with procurement, suspension, and debarment was not determinable. Due to lack of multiple bids, we are unable to determine whether the Tribes would have received a different contract price if procurement policies were followed. Repeat finding: This is not a repeat finding from the prior year. Recommendation: The Tribes should ensure procurement policies are followed and procedures are in place to verify suspension and debarment requirements are followed prior to contracting with vendors exceeding the suspension and debarment threshold. Views of responsible officials and planned corrective action: The Tribes will ensure compliance with procurement policies by strengthening procedures to verify suspension and debarment requirements before entering into contracts exceeding the applicable threshold. The Procurement Department will maintain supporting documentation for all bid processes and sole source justifications to ensure adherence to federal and tribal procurement standards.