FAC Explorer

Finding 1238689 (2025-002)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2025
Accepted
2026-09-30
Audit: 413610
Organization: Oregon Tilth, INC (OR)
Auditor: KERN & THOMPSON LLC

AI Summary

  • Core Issue: The Organization failed to verify that contracted entities were not suspended or debarred from federal participation, risking noncompliance with federal award requirements.
  • Impacted Requirements: Non-federal entities must ensure compliance with 2 CFR 200.14, which prohibits contracting with suspended or debarred parties.
  • Recommended Follow-Up: Implement internal controls to verify the status of entities before procurement, such as checking SAM.gov or including debarment clauses in contracts.

Finding Text

2025-002 Finding – Federal Award Finding Type: Significant Deficiency in Internal Control over Compliance and Noncompliance – Procurement and Suspension and Debarment Identification of Federal Program: AL Number: 10.163 – Market Protection Program Criteria / Requirement: Non-federal entities are prohibited from contracting with parties that are suspended or debarred from doing business with the federal government per 2 CFR 200.14. When a non-federal entity enters into a contract they must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. Condition / Context: During the audit, two procurements made during the year ending December 31, 2025 were tested. The testing showed that the Organization did have a Procurement Policy in place and was following their own guidelines for the procurements tested. However, the entities that were awarded the contracts were not verified to be not suspended or debarred from participating in the transaction due to federal funding. Retroactively, the names of the two entities were searched and confirmed not to be suspended or debarred from participating in the transactions. Cause: While procedures were in place to appropriately procure goods and services, there were no procedures in place to ensure that the awarded entity was not suspended or debarred from doing business with the federal government. Effect: The Organization could have entered into a contract with an entity that was prohibited from receiving federal funds, resulting in noncompliance of federal award requirements. Questioned Costs: None Recommendation: We recommend that the Organization implement the necessary internal controls to ensure that, for each procurement entered into using federal funds, the entity is verified or certified as not being suspended or debarred from participating in the transaction. This can be accomplished by searching the entity's name in the exclusions database at SAM.gov, obtaining a certification from the entity, or including a clause or condition related to suspension and debarment in the contract with the entity. Management’s Response: Management concurs with the finding and will implement effective internal controls to ensure that contracts utilizing federal funds are not awarded to entities that are suspended or debarred from the transaction.

Corrective Action Plan

Management concurs with the finding and recognizes the importance of ensuring that all procurements utilizing federal funds comply with applicable suspension and debarment requirements. To address this finding, management will strengthen its procurement procedures to require verification that all vendors, sub-recipients and contractors receiving federal funds are not suspended, debarred, or otherwise excluded from participation in federal transactions prior to entering into a contract or issuing an award. For each applicable procurement, the Organization will document verification of the vendor's eligibility by performing a search of the federal exclusions database at SAM.gov or by obtaining an appropriate certification from the vendor. The Organization will retain documentation of the verification with the related procurement and contract records in the form of a screenshot or pdf of the SAM.gov database search. Where appropriate, contracts will also include a suspension and debarment provision. Management will incorporate this verification step into the Organization's contract and procurement review process and will provide guidance to personnel responsible for federal procurements regarding the requirement. The Grant Financial Manager will verify that the suspension and debarment check has been completed and documented before the procurement is finalized. Management believes these corrective actions will strengthen internal controls and reduce the risk of entering into contracts with entities that are suspended, debarred, or otherwise excluded from participating in federally funded transactions. Responsible Party: Renee Kempka Anticipated Completion Date: 09/15/2026

Categories

Procurement, Suspension & Debarment

Programs in Audit

ALN Program Name Expenditures
10.163 MARKET PROTECTION AND PROMOTION $5.33M
10.902 SOIL AND WATER CONSERVATION $691,309
10.460 RISK MANAGEMENT EDUCATION PARTNERSHIPS $120,928