Finding Text
2025-004 U.S. Department of the Treasury, Passed through the State of Michigan Federal Financial Assistance Listing 21.029, CV0019120, 2025 COVID-19 – Coronavirus Capital Projects Fund Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria – Uniform Guidance and 2 CFR sections 200.318 through 200.327 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition – In our testing of procurement, suspension, and debarment it was identified that the Cooperative’s written policy did not address the requirements of 2 CFR sections 200.318 through 200.327. In addition, the Cooperative did not follow procurement, suspension, and debarment procedures required under the Uniform Guidance prior to entering into contracts with vendors. Cause – Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with all of these requirements. Effect – A lack of compliant policies and procedures increases the overall risk of noncompliance. Questioned Costs – None reported. Context/Sampling – Two out of four procurement contracts were selected for testing. Repeat Finding from Prior Years – Yes. Recommendation – We recommend that management establish a written policy that is in compliance with all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.327 and maintain adequate supporting documentation and records to document history and methods of procurement, suspension, and debarment procedures performed to comply with these CFR sections. Views of Responsible Officials – There is no disagreement with the audit finding.