Finding Text
Federal Agency: U.S. Department of Veteran Affairs Federal Program Name: Supporting Services for Veteran Families Program Assistance Listing Number: 64.033 Federal Award Identification Number and Year: 14-IN-200, 14-IN-200-LT Award Period: October 1, 2022 – September 30, 2026 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The Organization should have internal controls designed to ensure compliance with those provisions. Condition: The Organization did not have a comprehensive procurement policy in compliance with the federal regulations for a majority of the period under audit. The Organization also did not have documentation to support that internal controls were performed to ensure vendors were not suspended or debarred prior to entering into the contract. Questioned costs: None Context: During our testing, it was noted that the Organization did not maintain documentation regarding its procurement transactions and evaluation of those transactions against a comprehensive procurement policy. In addition, the Organization did not maintain documentation illustrating that it had reviewed vendors prior to entering into a contract with a vendor to ensure the vendor was not on the suspended or debarred vendor list maintained by the General Services Administration. This exception was noted for 5 of the 5 items tested, however, we were able to verify that the selected vendors were not suspended or debarred. Cause: The Organization did not establish a comprehensive procurement policy and updates to the policy were not formally adopted until March 2025 as part of the prior year’s corrective action plan, resulting in a repeat finding for the period of the year the policy was not in place. In addition, the Organization was unable to locate documentation to support the performance of procedures to ensure vendors were not suspended or debarred. Effect: For both procurement and suspension and debarment, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2024 – 003. Recommendation: We recommend the Organization utilizes the comprehensive procurement policy that complies with the federal regulations and that the Organization enhances controls to ensure an adequate process is in place to review potential vendors to determine they are not suspended or debarred and to ensure documentation to support this is maintained. Views of responsible officials: There is no disagreement with the audit finding. The Organization had a finding related to the year ended June 30, 2024 that was not uncovered until February 2025 during the 2024 audit. While this was rectified in March 2025, it is considered a repeat finding for the year ended June 30, 2025 due to the timing of the InteCare, Inc. annual audits.