Finding 1239721 (2024-004)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2024

Accepted

2026-10-01

Audit: 414431

Organization: THE NATIONAL RHCA TRAINING AND SAFETY FOUNDATION (TX)

Auditor: SUTTON FROST CARY LLP

AI Summary

Core Issue: The Foundation failed to document checks confirming that a contractor was not suspended or debarred before contract approval.
Impacted Requirements: Compliance with 2 CFR Part 180 regulations regarding contractor eligibility for federal awards was not adequately enforced.
Recommended Follow-up: Establish internal controls to verify contractor status on SAM.gov and retain documentation of these checks prior to contract finalization.

Finding Text

Finding 2024‐004: Suspension and debarment – significant deficiency in internal control over compliance Criteria: Regulations in 2 CFR Part 180 restrict subrecipients from entering into contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in federal awards. Condition: The Foundation did not maintain documentation to support their determination that a contractor was not suspended or debarred before entering into a contract. Cause: Inexperience with federal awards resulted in document retention failures. Effect: The Foundation’s internal controls over suspension and debarment compliance were not properly designed and implemented to reduce the risk of noncompliance with federal requirements. The contractor was not suspended or debarred by the federal government. Questioned Costs: None Recommendation: The Foundation should implement internal control processes to ensure all contractors paid with federal funds are searched on SAM.gov to ensure they are not suspended or debarred before the contract is finalized. Dated documentation should be retained to support that the search was completed before the contract was signed. Management’s response: See corrective action plan.

Corrective Action Plan

Finding 2024‐004 ‐ Suspension and Debarment Management response. Management acknowledges the need to retain contemporaneous evidence that the required exclusion check was completed before contract execution. As stated in the draft audit report, the contractor reviewed was not suspended or debarred, and no questioned costs were identified. Corrective action already implemented / being implemented. The Foundation is implementing the SAM.gov verification and retention requirements established in the Foundation Financial & Procurement Manual. The control process includes: Completing a SAM.gov exclusion search before award or contract execution whenever required by the applicable federal grant, agency regulations, or award terms. Retaining dated evidence of the search in the procurement file, including the entity name and other identifying information used, the search result, the date, and the person performing the verification. Including the verification on the procurement‐file checklist and requiring supervisory confirmation that the evidence is present before the contract is executed. Repeating or updating the verification for a material contract amendment or new transaction when required by the applicable federal grant, agency regulations, or award terms. Retaining the SAM.gov documentation with the contract and other procurement records for the required retention period.

Other Findings in this Audit

1239718 2024-001

Material Weakness Repeat
1239719 2024-002

Material Weakness Repeat
1239720 2024-003

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
21.027	CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS	$1.69M