Finding Text
2025-001 – FosterHub did not have a process to determine if vendors were suspended or debarred from receiving federal funds Federal Agency: Department of the Treasury Assistance Listing Number: 21.027 Award Period: 03/25/2024 to 12/31/2026 Type of Finding: Significant Deficiency in Compliance for Each Major Program Criteria or Specific Requirement: According to 2 CFR 200.213, non-federal entities must ensure that they do not enter into any contracts or subcontracts with parties that are suspended or debarred. This requires the establishment of procedures to review the eligibility of vendors, including sub-awardees before engaging in any contractual agreements. Condition: FosterHub does not have a formal suspension and debarment procedure in place to review vendors. This lack of procedure increases the risk of engaging in contractual relationships with entities that are suspended or debarred, which is a violation of federal regulations. Questioned Costs: Indeterminable Context: During the audit period, FosterHub entered into agreements with vendors without performing suspension and debarment reviews. During the engagement we did not note any transactions involving vendors who were suspended or debarred. Cause: The primary cause of this finding is the lack of awareness of federal requirements concerning suspension and debarment procedures. Effect: Failing to implement a suspension and debarment procedure exposes FosterHub to risks, including potential financial losses, reputational damage, and non-compliance with federal regulations. This non-compliance could result in penalties and a loss of federal funding. Repeat Finding: Yes Auditor’s Recommendation: It is recommended that FosterHub develop and implement a suspension and debarment procedure to review the eligibility of vendors before entering into contracts. Training should be provided to all relevant staff to ensure awareness and compliance with federal requirements. Additionally, periodic monitoring and internal audits should be conducted to ensure adherence to the established procedures. Views of Responsible Officials and Planned Corrective Actions:Management acknowledges the finding and agrees with the recommendation. FosterHub has already developed and implemented a formal suspension and debarment procedure in early 2026. Training sessions have been conducted for all procurement staff to ensure understanding and compliance with the new procedure. Furthermore, periodic reviews will be instituted to monitor adherence to these requirements and to prevent the recurrence of this issue.