Finding Text
SIGNIFICANT DEFICIENCY; CRITERIA:Per 2 CFR 200.323 and 2 CFR 200.323, the auditee must perform a cost or price analysis with all procurement actions exceeding the simplified acquisition threshold, including contract modfications. The analysis must support the related procurement action. ; CONDITION: For the fiscal year ending June 30, 2025 four expenditures were identified where cost or price analysis was not performed prior to procuring the services of the vendor.; EFFECT: Unformalized or unperformed cost and price analysis constitutes noncompliance with federal procurement requirements. Expenditures made for these projects were therefore not properly vetted for reasonableness prior to their authorization. This may impair federal oversight and increase the risk of enforcement actions, such as heightened monitoring, restrictions on future funding, or other administrative remedies deemed appropriate by awarding agencies such as clawback of funding.; CAUSE: The effects of Hurricane Helene required Town staff to respond quickly to emergent needs of its citizens. Standard procedures were not in place and operating to ensure reasonableness of expenditures of this nature.; RECOMMENDATION: Finance procedures should include emergency protocols that ensure compliance with likely funding sources such as FEMA.; VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Town of Spruce Pine agrees with this finding. Finance procedures will be updated to include a standard form and procedure for cost and price analysis that will be implemented immediately.