Finding Text
Department of Veteran Affairs FFAL #64.033, 20-SD-136-25, 10/1/2024 – 12/31/2025 FFAL #64.033, 20-SD-136-26, 10/1/2025 – 9/30/2026 VA Supportive Services for Veteran Families Program Procurement, Suspension & Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.318 maintains that recipients must have and use documented procurement policies and must conform with procurement standards in sections 200.317 through 200.327. Additionally, 2 CFR 200.214 requires recipients to restrict making contracts with certain parties that are debarred, suspended, or excluded from participating in Federal awards. Condition: Testing of the federal program identified the following: a. The Organization’s formally documented procurement policy is missing one required element as it relates to domestic preferences (2 CFR 200.322). b. Two lease agreements were entered into where the Organization did not follow the procurement process as detailed in the procurement policy. The lease agreements with the vendors were also missing a required contract provision in accordance with Uniform Guidance and there was no review performed by the Organization to ensure the vendors were not suspended or debarred as the lease agreements with the vendors were over $25,000. Cause: Individuals with key roles over compliance reporting were not involved in the Organization’s compliance reporting activities for the full year. Contract provisions were not evaluated compared to Uniform Guidance contract requirements. Lease agreements entered into were not evaluated in accordance with Uniform Guidance as it relates to suspension and debarment. Effect: Ineffective controls over this area of compliance could result in a reasonable possibility the Organization would be noncompliant with the compliance requirements outlined above. Additionally, the Organization may enter into a covered transaction with a vendor that is suspended or debarred. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 2 out of 4 vendors were selected for testing. Repeat Finding from Prior Year: No Recommendation: We recommend the Organization update their procurement policy to ensure it includes the required elements as it relates to domestic preference. In addition, we suggest that management implement procedures and control processes related to the review of contracts to ensure the procurement methods are being followed, documentation is being retained, and that the contracts include the required Uniform Guidance provisions. Also, management should ensure vendors are not suspended or debarred from doing business with the federal government. Views of Responsible Officials: Management agrees with the finding.