Finding Text
Federal Agency: Legal Services Corporation (LSC) Federal Program Name: LSC Grants Assistance Listing Number: 09.742018 Federal Award Identification Number and Year: 09.742018 2025 Award Period: 1/1/2025-12/31/2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance 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. Non-federal entities are prohibited from contracting with or making subawards under covered transactions that are suspended or debarred. Before entering into a covered transaction, the entity must verify that the contractor is not suspended, debarred, or otherwise excluded from participating in the transaction. Condition: During our testing, we noted the Organization did not have adequate internal controls designed to ensure vendors were not suspended or debarred. The Organization did not retain documentation that the suspension and debarment status of contractors were verified prior to entering into the contract. Context: During our testing, we noted no established procedures were in place during the year to review that vendors were not suspended or debarred. Cause: Per discussions with management, the Organization adopted a new procurement policy that includes procedures for a review of vendors for suspension or debarment, however, procedures were not yet implemented in 2025. Effect: The Organization could have entered into an agreement with a contractor that was suspended or debarred. The absence of documentation performed prior to contract execution presents a risk of noncompliance with applicable procurement regulations. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Organization design controls to ensure an adequate review process is in place to review potential contractors to determine they are not suspended or debarred prior to entering into transactions with contractors. Views of responsible officials: There is no disagreement with the audit finding.