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Finding Number: 2025-006 Finding Type: Federal award finding Federal Assistance Listing No.: 15.685 Program Name: National Fish Passage Federal Agency: The U.S. Department of Interior Pass-Through Entity: n/a Grant Number: F24AC01768-00 Award Project Period: July 1, 2024 through July 1, 2029 Control Deficiency Type: Significant deficiency Instance of Noncompliance: Yes Compliance Requirement: Procurement, suspension and debarment Repeat Finding: No Criteria: A non-federal organization must follow its own documented procurement procedures, provided they comply with applicable state and local laws and align with the federal standards outlined in 2 CFR 200.318–200.327. Specifically, 2 CFR 200.318(i) requires entities to maintain records sufficient to detail the history of the procurement, including but not limited to the rationale for the procurement method chosen, the basis for selecting or rejecting contractors, and the justification for the contract price. In addition, all procurement transactions must be conducted in a manner providing full and open competition. Furthermore, federal requirements prohibit grant recipients from contracting with, or purchasing from, contractors who are suspended and debarred from doing business with the federal government. Whenever the organization enters into contracts or purchases goods or services with federal funds that it expects to equal or exceed $25,000, it must verify that the contractor or vendor has not been suspended, debarred or otherwise excluded. Finally, the organization must ensure that all federal programs comply with Section 70914 of the Build America, Buy America (BABA) Act for infrastructure projects. Condition: The Council has enacted a written procurement policy, which management believed met all the standards required under 2 CFR 200.318 through 200.327. However, the policy failed to include some of the most stringent requirements included in the Uniform Guidance. The organization did not comply with all the documentation requirements laid out in its procurement policy. In addition, the suspension and debarment verification occurred after the contract was entered into, and there was no documentation maintained to demonstrate the monitoring of contract compliance with BABA. Cause: This was the Council’s first year receiving direct federal funding and its first Single Audit. The organization is very small and has limited prior experience with federal procurement requirements. Effect: The absence of aligned written procurement policies and timely documentation increases the risk of non-compliance with federal procurement standards. While no unallowable costs were identified and the contractor was not suspended or debarred, the issues reflect a control deficiency in procurement documentation, suspension and debarment procedures, and monitoring of federal award requirements. Questioned Costs: None. Audit Recommendation: We recommend the Council: • Update its procurement policy to align with federal procurement methods, thresholds, and requirements. • Develop written procedures for technical evaluations, contractor selection, and documentation of procurement decisions. • Perform suspension and debarment verification prior to contract award. • Establish monitoring procedures for contractor compliance with federal award provisions, including Build America, Buy America Act requirements. Management’s Response: Rogue River Watershed Council will review 2 CFR 200.318 through 200.327 and update our Procurement Policy to meet the necessary standards. We will strengthen our policy by setting out procedures related to, when required: (1) suspension/ debarment verification of contractors (including the timing of such verification) and (2) required agreement language related to grant-required stipulations such as BABA requirements, monitoring, compliance, and documentation.