Finding Text
Federal Award Program: U.S. Department of Commerce Pacific Coast Salmon Recovery - Pacific Salmon Treaty Program (Assistance Listing #11.438) Type of Finding: Significant deficiency in internal control over compliance Compliance Requirement: Procurement Criteria: The Uniform Guidance (2 CFR § 200.318 through 327) requires recipients and subrecipients to maintain and use documented procurement procedures that are consistent with applicable federal statutes, regulations, and the procurement standards in 2 CFR part 200. It also requires written standards of conduct covering conflicts of interest for employees engaged in the selection, award, and administration of contracts. Condition: The written procurement policy was not sufficient to demonstrate compliance with the Uniform Guidance procurement requirements applicable to the major program. Although the policy included certain procurement-related provisions, it did not fully incorporate the procurement standards and required procedures under 2 CFR § 200.318 through 200.327, including requirements related to allowable procurement methods, competition, procurement-specific conflicts of interest, and contractor eligibility considerations. As a result, the written policy did not provide an adequate framework to support compliance with federal procurement requirements for procurements charged to the major program. Cause: The written procurement policy was not designed or updated to incorporate the Uniform Guidance procurement standards applicable to federal awards. Management appears to have relied on its general contractor procurement practices and separate conflict-of-interest policy rather than developing a comprehensive federal procurement policy that conforms to 2 CFR part 200. In addition, there did not appear to be an effective review process to ensure that written procurement procedures for the major program included all required federal procurement elements. Effect and Context: Because the written procurement policy does not conform to the Uniform Guidance, the subrecipient may procure goods or services using procedures that do not provide full and open competition, do not obtain required quotations, or do not meet the limited conditions for noncompetitive procurement. This increases the risk that federal funds may be used for procurements that are not allowable under the award terms and 2 CFR part 200. It also increases the risk of unsupported procurement decisions, conflicts of interest, awards to suspended or debarred parties, and contracts that omit required federal provisions. Repeat finding: No. Auditor’s recommendation: Management should revise its written procurement policy to conform to the Uniform Guidance procurement standards applicable to federal awards. Management’s response: Management is in agreement with the finding. See corrective action plan.