Finding Text
Finding Type: Material Weakness in Internal Control over Major Programs Assistance Listing #: 84.116Z Fund for the Improvement of Postsecondary Education Award Year: July 1, 2024, through June 30, 2025 Criteria: Under 2 CFR 200.317 through 200.327, non-Federal entities must maintain and follow documented procurement procedures that conform to applicable Federal law and standards. Specifically, 2 CFR 200.320 requires entities to obtain price or rate quotations from an adequate number of qualified sources for purchases falling under the simplified acquisition threshold (small purchases). Additionally, under 2 CFR 180.220 and 2 CFR 180.300, non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. For procurement contracts, a covered transaction is any contract expected to equal or exceed $25,000. Entities must verify that the vendor is not excluded or disqualified by checking the System for Award Management (SAM.gov) Exclusions, collecting a certification, or adding a clause to the covered transaction. Condition: During our testing of Procurement, Suspension, and Debarment, we noted the following deficiencies: 1. Procurement: The University’s procurement policies and practices did not meet minimum federal requirements. The University failed to obtain or document an adequate number of quotes for small purchases exceeding the micro-purchase threshold. 2. Suspension and Debarment: The University did not have controls in place to verify the suspension and debarment status of vendors. Management did not check the SAM.gov exclusions list, obtain vendor certifications, or include required clauses in contracts for covered transactions exceeding $25,000. Cause: Internal controls over Procurement and Suspension and Debarment were not properly designed or implemented. Management was unaware of the specific federal requirements regarding small purchase quotation documentation and the mandate to verify vendor exclusion status for contracts over $25,000. Effect or Potential Effect: By failing to obtain adequate quotes, the University cannot ensure that federal funds were used to obtain the most advantageous pricing, potentially resulting in overpayments for goods and services. By failing to verify suspension and debarment status, the University is at high risk of entering into covered transactions with federally excluded or debarred parties. Questioned Costs: $526,874 represents the total sum of federal funds disbursed to vendors in our sample where required procurement procedures and/or suspension and debarment verifications were not performed.