Finding Text
FINDING 2025‐002 – Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance and Instance of Material Noncompliance Assistance Listing Number: 21.029 Federal Program Name: COVID-19 - Coronavirus Capital Projects Fund Award Year: 2024 Criteria: Uniform Guidance requires non-federal entities to establish and adhere to documented procurement procedures and ensure compliance with suspension and debarment requirements. 2 CFR §200.318(a): Requires entities to have and use documented procurement procedures consistent with federal standards. 2 CFR §200.318(i): Requires maintenance of records sufficient to detail the history of procurement. 2 CFR §200.214: Prohibits contracting with parties that are suspended or debarred, requiring verification. Condition and context: The Cooperative has not developed or implemented formal written procurement policies and procedures that comply with Uniform Guidance requirements. Additionally, the Cooperative has not established procedures to ensure compliance with suspension and debarment requirements. As a result, for a sample of two vendors and nine procurement transactions tested, the Cooperative did not document suspension and debarment verification (e.g., SAM.gov) for vendors and contractors procured under the federal award. The absence of documented procedures also indicates that procurement activities are not being performed under a standardized framework aligned with federal requirements. Questioned costs: None. Effect: Due to the lack of formalized procurement processes and controls there is an increased risk of noncompliance with federal procurement standards. Expenditures could be paid to suspended or debarred vendors resulting in disallowed expenditures, and noncompliance with the grant agreement. Cause: Management did not have a sufficient understanding of the procurement-related control requirements necessary to comply with the grant agreement and Uniform Guidance. As a result, procurement processes were not formally established or aligned with federal requirements. Repeat finding: Yes. Recommendation: We recommend the Cooperative develops and implements written procurement policies and procedures in compliance with 2 CFR §200.318–§200.327, including competitive procurement requirements, cost/price analysis, documentation, and record retention. Establish procedures to ensure compliance with suspension and debarment requirements, including performing SAM.gov verification prior to contract award and retaining documentation of verification in procurement files. Lastly, we recommend implementing monitoring controls to ensure procurement documentation and compliance requirements are consistently met. Views of responsible officials and planned corrective actions: Wabash currently maintains the process of procurement standards and internal controls. While we previously managed contractor selections through established internal practices, we recognize the requirement for a comprehensive written procurement policy that explicitly outlines selection criteria and mandatory debarment verification procedures. To remediate the identified material weakness, Wabash implemented a formal Procurement Policy and Procedure June 30, 2026. Contact Person(s): Jason Griffy, Network Operations Manager Justin Gephart, Chief Operating Officer