Finding Text
FINDING 2025-002 Internal Control over Compliance and Compliance with Procurement, Suspension and Debarment (Significant Deficiency and Noncompliance) Federal Agency: Various Federal Agencies Federal Program: Research and Development Cluster Assistance Listing Numbers: 47.076, 93.243, and 47.010 (Direct Awards) Criteria: Uniform Guidance requires recipients and subrecipients to maintain and use documented procurement procedures for procurement transactions under a Federal award or subaward, and such procedures must be consistent with the procurement standards in 2 CFR § 200.317 through 200.327. In addition, 2 CFR § 200.320(a)(1)(ii) provides that micro-purchases may be awarded without soliciting competitive price or rate quotations only if the recipient or subrecipient considers the price reasonable based on research, experience, purchase history, or other information and maintains documentation to support its conclusion. Condition: During the audit, we tested five (5) vendors classified as micro-purchases. For each selected vendor, the University was unable to provide documentation evidencing that a cost or price reasonableness review was performed prior to vendor selection or contract execution. Specifically, the procurement files did not include pricing comparisons, competing quotes, market research, purchase history, documented experience, or other support demonstrating how the contract price was determined to be reasonable. Effect or Potential Effect: Without documented evidence of price reasonableness, the University cannot demonstrate that micro-purchase awards were made in accordance with Uniform Guidance procurement requirements. This increases the risk that federally-funded procurement transactions may not be supported by adequate documentation to demonstrate that prices paid were reasonable, and that procurement decisions may not be consistently supported, reviewed, and retained in accordance with federal requirements. Context: This is a condition based on testing the University’s compliance with specific requirements. The prevalence of this finding is detailed in the condition above. The samples were selected using a non-statistical method. Cause: The University did not consistently maintain documentation within its procurement files to evidence that price reasonableness was considered and supported prior to vendor selection or contract execution for micro-purchase transactions. Questioned Costs: No questioned costs were identified. The finding relates to insufficient documentation supporting the price reasonableness determination of certain procurements. Recommendation: We recommend that the University strengthen its procurement procedures for federally-funded micro-purchases to require documentation of price reasonableness prior to approval of the purchase or execution of the contract. We further recommend that the University require such documentation to be retained in a consistent manner and that procurement personnel review the documentation for completeness before approval. Views of Responsible Official: Management’s corrective action plan, including immediate remediation steps and enhancements to internal controls over Procurement, Suspension and Debarment, is presented in the Corrective Action Plan section of this report.