Finding Text
Criteria Non-Federal entities are prohibited from entering into covered transactions with parties that are suspended, debarred, or otherwise excluded from participation in Federal assistance programs in accordance with 2 CFR Part 180, as adopted by Federal agencies. Additionally, 2 CFR 200.214 requires non-Federal entities to ensure that Federal awards are not made to parties listed as excluded in the System for Award Management (SAM). The Compliance Supplement further requires non-Federal entities to establish and maintain effective internal controls to provide reasonable assurance that vendors involved in covered transactions under Federal awards are properly screened and verified for eligibility prior to entering into such transactions. Condition The College did not have an updated suspension and debarment policy or established procedures in place to ensure that vendors utilized in federally funded R&D transactions were not suspended, debarred, or otherwise excluded from participation in Federal programs. Although management was able to locate a suspension and debarment policy, management indicated that the policy was outdated and not followed in practice. As a result, the College did not consistently perform or document verification internal control procedures to confirm vendor eligibility through SAM prior to entering into covered transactions under Federal awards during the audit period. There were no instances of noncompliance identified in our sample of 4. Cause The condition occurred because the College did not maintain effective internal controls or current procedures to ensure compliance with Federal suspension and debarment requirements. Specifically, although a policy existed, it was outdated and not implemented in practice. In addition, the College did not establish a formal process to routinely verify and document vendor eligibility for covered transactions under Federal awards. Possible Asserted Affect Failure to establish and maintain effective controls over suspension and debarment may cause the College to enter into transactions with vendors that are suspended, debarred, or otherwise excluded from participation in Federal programs. This condition may result in noncompliance with 2 CFR Part 180, 2 CFR 200.214, and the Procurement, Suspension and Debarment requirements of the OMB Compliance Supplement for the R&D Cluster, and limits the College’s ability to demonstrate compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Recommendation We recommend that the College update and formally implement its suspension and debarment policy to ensure it is current, aligns with applicable Federal regulations, and is followed in practice. Specifically, the College should establish and document procedures to require verification of vendor eligibility through the System for Award Management (SAM) prior to entering into covered transactions under Federal awards. Additionally, the College should ensure that such verification procedures are performed consistently, documented appropriately, and retained to demonstrate compliance with 2 CFR Part 180, 2 CFR 200.214, and the Procurement, Suspension and Debarment requirements of the OMB Compliance Supplement for the R&D Cluster. Management should also consider periodic monitoring or review of these procedures to ensure ongoing compliance with Federal award requirements. Views of Responsible Officials The College concurs with this finding. To mitigate the risk of entering into covered transactions with suspended or debarred vendors, the College is updating and formalizing its suspension and debarment policy, establishing procedures to require and document SAM verification prior to covered transactions under Federal awards, and implementing periodic monitoring to ensure these procedures are performed consistently. These corrective actions are being implemented in fiscal year 2026.