Finding Text
2025-002: Academic Programs - Suspension and Debarment (Significant Deficiency) Assistance Listing Number/Title: #81.252, Academic Programs Federal Agency Name: U.S. Department of Energy Award Number: DE-LM0000497 Award Year: October 1, 2023 - March 31, 2025 Criteria: Per 2 CFR 200.303(a), a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the Federal award is managed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per review of 2 CFR 200.213, non-Federal entities are prohibited from contracting with, or making sub-awards under covered transactions to, parties that are suspended or debarred or whose principals are suspended or debarred. Covered transactions include contracts for goods and services awarded under a non-procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., sub-awards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. Condition/context: Of the two vendors selected and tested, we determined that: • One vendor did not have a suspension and debarment clause in the contract and the College did not perform other verification procedures to ensure that the contractor was not suspended or debarred. However, we independently verified that the contractor was not suspended or debarred per review of sam.gov. • One vendor did not have a suspension and debarment clause in the contract, and while the College provided documentation of its review of sam.gov to verify that the contractor was not suspended or debarred, that documentation did not contain evidence that the verification was performed timely (i.e., before entering into the contract with the vendor). Cause: The College’s preferred verification for suspension and debarment is checking sam.gov. The program’s backup method of verification is a standard suspension and debarment clause within the formal contract. However, the program’s control system did not function as designed. Effect: If the College is not verifying that vendors with which it contracts are neither suspended nor debarred or keeping record of such verification, it is possible that the College could contract with a vendor that is suspended or debarred, in which case the College may be required to return the funds expensed to that vendor to the Federal oversight agency. Questioned costs: None. Identification as a repeat finding: No. Recommendation: We recommend that the College review and revise its current control system to require that all contracts be initiated through a procurement process that includes the suspension and debarment certification process. If this is not feasible, we recommend that a secondary control system be established to ensure that all contracts entered into outside of the procurement process be reviewed to ensure compliance with all of the necessary Federal requirements, including suspension and debarment. This could include documenting and keeping records of the sam.gov checks being completed for each vendor and showing proof that each was reviewed by appropriate personnel in a timely manner. Views of responsible officials: Management concurs with the finding. See Exhibit I for corrective action plan.