Finding Text
Department of Treasury 2025-002 – Internal Controls over Compliance Coronavirus State and Local Fiscal Recovery Fund Criteria: In accordance with 2 CFR 200.318(a), non-federal entities must use and maintain documented procurement procedures that comply with the procurement standards contained in Uniform Guidance. Written policies and procedures should establish requirements for procurement transactions, including methods, competition requirements, conflict-of-interest provisions, and purchasing thresholds. Condition: During our audit, we noted the Organization had not adopted formal written procurement policies and procedures governing purchases made with Federal award funds. Specifically, the Organization had not documented procurement methods, purchasing thresholds, quotation requirements, sole-source procurement requirements, or procedures for ensuring compliance with applicable Federal procurement standards. Although testing of procurement transactions selected for examination did not identify instances of noncompliance with Uniform Guidance procurement requirements, the Organization’s procurement practices were based on informal procedures. Cause: Management has not formally established and approved written procurement policies and procedures that incorporate the requirements of Uniform Guidance. Effect: The absence of documented procurement procedures increases the risk that Federal procurement requirements may not be applied consistently across the Organization and may not be effectively communicated to employees responsible for purchasing activities. In addition, the lack of formalized procedures increases the risk that noncompliance with Federal procurement requirements could occur and not be prevented or detected in a timely manner, particularly in the event of personnel turnover or changes in organizational responsibilities Auditor’s Recommendation: We recommend that management develop and formally adopt written procurement policies consistent with Uniform Guidance. At a minimum, such policies should address procurement methods and thresholds, competitive bidding and quotation requirements, sole-source procurement documentation, conflict-of-interest standards, contractor responsibility determinations, suspension and debarment considerations, and procurement record retention requirements. Management’s Response: We have documented and adopted our Procurement Policy in accordance with Uniform Guidance. A copy of this policy will be provided upon request.