Finding Text
Federal Agency: U.S. Department of Agriculture Federal Program Name: State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Assistance Listing Number: 10.561 Federal Award Identification Numbers and Years: 202525S252047 - 2025; 202626S26197 - 2025; 202626S262047 - 2025 Award Period: 10/1/24 - 9/30/25; 10/1/25 - 9/30/26 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance Criteria or specific requirement: In accordance with 2 CFR 200.318(a), non-Federal entities must maintain and follow documented procurement procedures that are consistent with applicable Federal statutes, regulations, and the terms and conditions of Federal awards. Additionally, 2 CFR 200.319(a) requires procurement transactions to be conducted in a manner providing full and open competition and supported by adequate documentation of the procurement process. Further, 2 CFR Part 180 and 2 CFR 200.214 prohibit non-Federal entities from entering into covered transactions with parties that are suspended or debarred and require verification that contractors are not suspended, debarred, or otherwise excluded from participation in Federal programs. These requirements were applicable to both the Department of Labor (CDL) and Department of Agriculture (BFET) major programs. Condition: During testing of the Procurement, Suspension, and Debarment compliance requirement for the Department of Labor (CDL) and Department of Agriculture (BFET) major programs, instances of noncompliance with federal procurement requirements were identified. Specifically, procurement files lacked required documentation demonstrating compliance with the organization's procurement procedures, including evidence of competition and Executive Director approval of vendor selections. In addition, procurement and vendor files lacked documentation supporting that suspension and debarment reviews were performed prior to entering into contracts with vendors. As a result, ANEW did not comply with federal Procurement, Suspension, and Debarment requirements applicable to the CDL and BFET major programs. Exceptions were identified in 2 of 4 procurement transactions and 3 of 3 suspension and debarment reviews tested for the Department of Labor program, and in 2 of 3 procurement transactions and 1 of 1 suspension and debarment review tested for the BFET program. In addition, the organization's procurement policy did not fully address all Uniform Guidance procurement requirements Questioned costs: None - despite insufficient documentation, all procured vendors tested were deemed to be reasonable for the program needs, and none were suspended or debarred, based on subsequent review. Context: ANEW expended federal funds under the Department of Labor (CDL) and Department of Agriculture Basic Food Employment and Training (BFET) programs, both of which are subject to Federal Procurement, Suspension, and Debarment requirements. As part of our compliance testing, we selected four procurement purchases under the CDL program and three procurement purchases under the BFET program. Of the four CDL procurement purchases tested, two lacked documentation evidencing Executive Director approval in accordance with the organization's procurement procedures. Of the three BFET procurement purchases tested, two lacked documentation evidencing Executive Director approval. In addition, we selected three vendors under each major program for suspension and debarment testing. For all 4 vendors tested across the CDL (3) and BFET (1) programs, management was unable to provide documentation demonstrating that required suspension and debarment reviews had been performed prior to entering into contracts with the vendors. In addition, the organization's procurement policy did not fully incorporate all Uniform Guidance procurement requirements, including requirements related to suspension and debarment procedures. Cause: Management's procurement policy was not fully aligned with Uniform Guidance procurement requirements and did not adequately address all required Federal procurement procedures. In addition, management did not consistently perform and retain documentation supporting procurement approvals and suspension and debarment reviews in accordance with Federal requirements and organizational policies. Effect: ANEW was unable to demonstrate compliance with certain Federal Procurement, Suspension, and Debarment requirements applicable to the CDL and BFET programs. As a result, the organization was exposed to an increased risk of entering into covered transactions with suspended or debarred vendors and of awarding procurements that were not supported by adequate competition or required approvals. Repeat Finding: No; this is the entity’s first single audit. Recommendation: We recommend management revise procurement policies to fully align with Uniform Guidance requirements and strengthen procedures to ensure procurement decisions, management approvals, competitive procurement documentation, and suspension and debarment verifications are consistently performed, documented, and retained. Views of responsible officials: There is no disagreement with the audit finding.