FAC Explorer

Finding 1229419 (2024-004)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2024
Accepted
2026-09-11
Audit: 410809
Organization: MICHIGAN FOUNDERS FUND (MI)
Auditor: CBIZ CPAS PC

AI Summary

  • Core Issue: The Organization lacks a formal written procurement policy, violating Uniform Guidance requirements.
  • Impacted Requirements: Noncompliance with 2 CFR Part 200 due to informal procurement practices.
  • Recommended Follow-Up: Develop and implement a formal procurement policy to ensure compliance and consistency in procurement activities.

Finding Text

Criteria: The Uniform Guidance requires a grantee to maintain a formalized written policy for procurement procedures that is in accordance with, or more stringent than, the federal requirements identified in 2 CFR Part 200. Condition: The Organization does not maintain a written procurement policy. While management indicated that procurement practices were performed in accordance with Uniform Guidance, these procedures were informal and not formally documented. The absence of a documented policy results in noncompliance with the requirements of Uniform Guidance. Cause: The Organization did not formally document procurement policies and procedures in accordance with Uniform Guidance requirements. Effect or Potential Effect: The lack of a formal, documented procurement policy increases the risk that procurement activities may not be performed consistently in accordance with requirements for full and open competition, cost reasonableness, and appropriate vendor selection. Questioned Costs: None Repeat Finding: No Recommendation: We recommend that management develop and implement a formalized procurement policy in accordance with Uniform Guidance and establish controls to ensure consistent application and documentation of compliance.

Corrective Action Plan

Remediation Steps Completed: In advance of this finding, MFF began remediation for this issue starting in 2024, through key hires, and extended in 2025 with the development of a full suite of financial and procurement policies. The steps taken are as follows: • A new Executive Director was hired on May 1, 2024 to run the organization. • A full-time Impact Manager was hired on December 9, 2024 to oversee grant management, reporting, and compliance. • A new contract finance and accounting firm and contract Financial Officer was selected and engaged in February 2025 for regular and ongoing financial management, accounting, and oversight. • A full-time Operations Director was hired on August 21, 2025 to oversee organizational systems development and management. • A full suite of financial and procurement policies was drafted in 2025 with input and guidance from the Financial Officer, Impact Manager, and Executive Director and informed by procurement standards as described in 2 CFR Part 200, Subpart D. • The Financial and Procurement Policies were formally adopted by the Michigan Founders Fund Board of Directors on June 15, 2026. • The Financial and Procurement Policies were implemented organization-wide on July 15, 2026. • In October 2025, in coordination between the Financial Officer and the Operations Director, an updated Spend & Expense system was implemented in Bill.com to maintain tighter controls over credit card purchasing and reimbursements. Ongoing Implementation, Monitoring, and Sustainability of the Corrective Action: To ensure this corrective action remains effective beyond initial adoption, MFF has built the following monitoring controls into its normal operating cycle: • The Financial and Procurement Policies are scheduled for internal review at least annually, with the next review scheduled for July 1, 2027, or sooner if required. • All staff and board members with purchasing authority will receive training on the new Financial and Procurement Policies at the time of adoption; training is repeated annually and incorporated into new-hire onboarding. • The Executive Director has been designated as the official with overall responsibility for procurement-policy compliance; the Operations Director is responsible for day-to-day monitoring and enforcement of the policy, including maintenance of complete procurement files. Anticipated Completion Date: July 2026 Contact Person: Rishi Moudgil, Executive Director Contact Phone Number: (313) 338-8292

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 1229417 2024-002
    Material Weakness Repeat
  • 1229418 2024-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $727,936
11.307 ECONOMIC ADJUSTMENT ASSISTANCE $81,746