Finding Text
Finding 2023-011—Suspension and Debarment Support Material Weakness / Material Noncompliance Federal Program: All federal awards. Criteria: Under 2 CFR 200.214 (Suspension and debarment) requires non-federal entities to comply with the requirements in 2 CFR Part 180 (and agency-specific supplements) and not enter into covered transactions with parties that are suspended, debarred, or otherwise excluded. Acceptable verification methods typically include: (1) checking SAM.gov for exclusion status, (2) obtaining a written certification from the entity, or (3) including appropriate clause/term in the subaward/contract and documenting verification before entering the covered transaction, consistent with 2 CFR Part 180 (Nonprocurement Debarment and Suspension). The OMB Compliance Supplement (Suspension & Debarment requirement) expects verification to occur prior to award (or at the time of contracting/subaward) and to be documented in the award file. Finding 2023-011—Suspension and Debarment Support (Continued) Condition: IFDC did not retain timely documentation evidencing that subrecipients/contractors under the federal program were checked for suspension and debarment status prior to award or payment. Management provided support that this was done but it was after the award and payment to vendors and subrecipients and no interim documentation of verification existed. Cause: Current IFDC policies do not require or explicitly define the timing (pre-award) and evidence (e.g., saved SAM record) for suspension/debarment verification for covered transactions. Effect: IFDC has increased risk that could enter or continue awards and transactions with excluded parties, resulting in noncompliance with 2 CFR 200.214 and 2 CFR Part 180. There is also potential financial risk if costs are disallowed or questioned due to awards and payments with ineligible parties. As of year-end, we did not identify any instance where a subrecipient/contractor was actually excluded; however, the lack of timely documentation represents noncompliance and a significant deficiency in internal control over compliance. Questioned costs: None noted. Context: IFDC recorded $5.1 million in subgrantee expenses and over $2.5 million in vendors that received over $25,000 during the year. Exceptions noted were not isolated and indicate a systematic documentation and control issue affecting the suspension and debarment requirement. Repeat Finding: No Recommendation: IFDC should update its policies and procedures to require pre-award verification for all covered transactions (as defined in 2 CFR Part 180) and to retain evidence (e.g., PDF/Screenshot of SAM.gov search results showing entity name, UEI, date/time stamp). In addition, IFDC should implement a standard pre-award checklist or system control (required field) to block award setup until a suspension/debarment verification date and evidence are recorded and establish monitoring procedures to confirm ongoing adherence and periodic re-checks when appropriate (e.g., multi-year awards at renewal or modification). Views of responsible officials and planned corrective actions: Management agrees with the finding. See corrective action plan.