Finding Text
Criteria: In accordance with 2 CFR §180 and §200.214, non-federal entities are prohibited from entering into covered transactions with parties that are suspended, debarred, or otherwise excluded from participation in federal programs. Entities must verify that contractors and subcontractors are not excluded by checking the System for Award Management (SAM.gov) prior to awarding contracts funded by federal awards. Condition and Context: During our audit of procurement activities under the Health Center Infrastructure Support federal award, we identified multiple instances where the entity failed to verify the suspension and debarment status of vendors prior to awarding contracts exceeding the $25,000 threshold. Documentation of verification through SAM.gov or equivalent methods was not available for these transactions. Subsequent review of SAM.gov indicated no instances of suspended or debarred vendors being used on the project funded with federal awards. Effect: Failure to verify vendor eligibility increases the risk of awarding federal funds to ineligible parties, which may result in questioned costs, reputational harm, and potential disallowance of expenditures by the federal awarding agency. Cause: While the Center’s formal policies dictate that procedures will be followed to ensure the above criteria are met, staff responsible for procurement were unaware of the verification requirement or did not consistently apply it. Recommendation: We recommend the entity ensure that staff involved with procuring contracts using federal awards are aware of the federal requirement, including the already-established policies that the Center has regarding such requirements. Staff involved in procurement should receive training on federal suspension and debarment requirements to ensure consistent compliance.