Finding Text
Criteria: Under 2 CFR §§200.318–200.320, non‑Federal entities must maintain oversight of procurement activities, conduct all procurement transactions in a manner providing full and open competition, and retain documentation supporting the procurement method used. The program’s operating contract further requires, in Section 29, that purchases over $3,000 and under $10,000 include at least three verbal bids; purchases between $10,000 and $25,000 include at least three written bids; and purchases over $25,000 be submitted to the Division of Public Transit for prior review and approval. Condition: For seven transactions exceeding $3,000, the entity was unable to provide documentation of procurement procedures, including evidence of required bidding or board approval. No records were available to show that verbal bids, written bids, or required submissions to the Division of Public Transit occurred as outlined in the operating contract. These exceptions were identified during procurement testing for the federal program. Each transaction exceeded the applicable procurement thresholds, yet no procurement records, approvals, or bid documentation were provided. Cause: The entity does not have adequate internal controls to ensure that procurement actions are conducted and documented in accordance with federal requirements and the operating contract. Procurement activities were not consistently recorded or retained. Effect: Without appropriate procurement documentation, the entity cannot demonstrate that purchases charged to the federal program were competitively procured or compliant with federal and contractual requirements. This exposes the program to the risk of uncompetitive or unreasonable costs. Recommendation: The entity should strengthen procurement controls to ensure all purchases follow 2 CFR §§200.318–200.320 and the operating contract. This includes documenting all bids, retaining procurement files, and obtaining required approvals prior to purchase. Management’s Response: Management agrees with the finding and will ensure all purchasing requirements are met as outlined in the operating contract and federal regulations and documented in applicable policies and procedures. Training on proper purchasing requirements is anticipated through the West Virginia Transit Authority.