Finding Text
Finding 2024-002 Procurement - Significant Deficiency Program name: Office for Coastal Management Assistance Listing: 11.473 Federal award Identification number: 20 NFWF 339630 Federal award year: 9/1/2020 - 9/30/2024 Federal awarding agency: U.S. Department of Commerce Criteria - Per 2 CFR 200.318 (i), recipients and subrecipients must maintain records sufficient to detail the history of each procurement. These records must include: rationale for the method of procurement; selection of contract type; contractor selection or rejection, and; basis for the contract price. Additionally, 2 CFR 200.318(a) requires entities to maintain and use documented procurement procedures that are consistent with applicable laws and regulations. Condition - The Organization has a written procurement policy in place; however, it was unable to provide documentation demonstrating that procurement transactions during the audit period were conducted in accordance with that policy. Specifically, the auditee did not retain records detailing the procurement method used, contractor selection rationale, or price justification for sampled transactions. Cause - The Organization did not maintain or consistently apply documentation protocols for internal control reviews. Formal documentation practices were not in place during the audit period. Effect - Without sufficient documentation, the auditee cannot demonstrate compliance with Federal procurement standards. This increases the risk of noncompliance with Uniform Guidance requirements and may result in unallowable costs or questioned costs. Questioned costs - None identified. Perspective - The deficiency was pervasive across multiple procurement transactions. Identification of Repeat Findings - This is a repeat finding from the prior year (Finding 2023-003). As a result of the 2023 audit report, issued in February 2026, the Organization began the process of developing updated policies for compliance. In 2025, the Organization formally adopted a new procurement policy as well as procedures to ensure proper documentation will be maintained. Recommendation - We recommend that the Organization strengthen its internal controls over procurement by: Ensuring all procurement transactions are documented in accordance with 2 CFR 200.319(i). Training staff on documentation requirements. Periodically reviewing procurement files for completeness and compliance. Management response - Management agrees with this assessment and has committed to a corrective action plan. Management has also engaged with a new accounting firm to oversee the financial reporting functions at the Organization.