Finding Text
Information on the federal program: Research and Development Cluster, Multiple Federal Grantors, Multiple Award Periods Criteria or specific requirement: Procurement and Suspension and Debarment In accordance with 2 CFR 200.219 and 200.220, non-Federal entities must conduct procurements in a manner providing full and open competition and maintain documentation supporting the procurement method and the basis for contractor selection. Noncompetitive (sole source) procurement is permitted only under specific circumstances and generally requires adequate written justification and applicable approvals prior to contract execution. In accordance with 2 CFR 200.214, 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. Condition: During our testing of procurement transactions, we noted that the Institute entered into a contract with a vendor using a noncompetitive/sole source method. However, the sole source justification was not completed and approved prior to execution of the contract and expenditures were charged to the federal grant. In addition, suspension and debarment checks were not completed for vendor. Cause: Miscommunication between departments within the Institute. Effect of Potential Effect: Failure to complete sole source documentation and suspension and debarment checks prior to award of the contract results in noncompliance with federal requirements and increases the risk that costs could be considered unallowable and federal funds could be paid to entities that are suspended or debarred. Questioned Costs: None noted. Context: We selected a sample of one vendor out of a population of four for procurement testing. This vendor was also selected for suspension and debarment testing out of a population of three vendors and subrecipients. Total expenditures charged to Federal grants under this contract was $26,850. The noncompetitive/sole source documentation and vendor suspension and debarment check were not completed and approved prior to execution of the contract and expenditures were charged to the Federal grant. It was noted after subsequent check that the subrecipient was not suspended or debarred. This sample was not intended to be, and was not, a statistically valid sample Identification as a Repeat Finding: 2023-002 Recommendation: Noncompetitive/sole source procurement documentation and suspension and debarment checks should be prepared, reviewed and approved before executing contracts and before charging costs to Federal grants. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the stated finding and has implemented a corrective action plan.