Finding Text
2025-003 – Hearts for the Invisible Charlotte Coalition did not have a process to determine if vendors were suspended or debarred from receiving Federal funds. Federal Agency: Department of the Treasury Assistance Listing Number: 21.027 Award Period: 05/01/2023 to 04/30/2026 Type of Finding: Significant Deficiency in Internal Controls Over Compliance for Each Major Program Criteria or Specific Requirement: According to 2 CFR 200.213, non-Federal entities must ensure that they do not enter into any contracts or subcontracts with parties that are suspended or debarred. This requires the establishment of procedures to review the eligibility of vendors, including sub-awardees, before engaging in any contractual agreements. Condition: Hearts for the Invisible Charlotte Coalition does not have a formal suspension and debarment procedure in place to review vendors. This lack of procedure increases the risk of engaging in contractual relationships with entities that are suspended or debarred, which is a violation of Federal regulations. Questioned Costs: Indeterminable Context: During the audit period, Hearts for the Invisible Charlotte Coalition entered into agreements with vendors without performing suspension and debarment reviews. During the engagement we did not note any transactions involving vendors who were suspended or debarred.Cause: The primary cause of this finding is the lack of awareness of Federal requirements concerning suspension and debarment procedures. Effect: Failing to implement a suspension and debarment procedure exposes Hearts for the Invisible Charlotte Coalition to risks, including potential financial losses, reputational damage, and non-compliance with Federal regulations. This non-compliance could result in penalties and a loss of Federal funding.Repeat Finding: NoAuditor’s Recommendation: It is recommended that Hearts for the Invisible Charlotte Coalition develop and implement a suspension and debarment procedure to review the eligibility of vendors before entering into contracts.Training should be provided to all relevant staff to ensure awareness and compliance with Federal requirements. Additionally, periodic monitoring and internal audits should be conducted to ensure adherence to the established procedures. Views of Responsible Officials and Planned Corrective Actions:Management acknowledges the finding and agrees with the recommendation. Hearts for the Invisible Charlotte Coalition is in the process of developing and implementing a formal suspension and debarment procedure, which is intended to be implemented in October 2026. Furthermore, periodic reviews will be instituted to monitor adherence to these requirements and to prevent the recurrence of this issue.