Finding Text
2025-009 – Procurement Suspension and Debarment – Material Weakness in Internal Controls over Compliance and Material Noncompliance Department of Education Federal Assistance Listing Number: 84.031 Federal Program Name: Higher Education Institutional Aid Federal Award Number: P031S210057, P031C210038 Award Year: 2024-25, 2023-24, 2022-23, 2021-22 Criteria – Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR 200.318 through 200.327. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR 180.220 Condition/context – Out of a sample of 2 procurement transactions selected for testing, for 1 transaction management was unable to provide supporting documentation for a signed contract, review and approval of purchase, or that the correct procurement policies were followed based on the contract value. Additionally, the University was unable to provide support that either vendor was reviewed for suspension and debarment prior to contract approval. Our sample was not, and was not intended to be, statistically valid. Questioned costs – The University asserted that the amount charged to the grant for the contractor was $63,174 however we were unable to obtain a signed contract or verify the total disbursements for the year. Cause/effect – The University does not have the proper controls in place to ensure procurement transactions adhere to the standards set out in 2 CFR 200.318 through 200.327, or to ensure covered transactions are being reviewed in accordance with 2 CFR 180.220. The lack of controls increases the risk of the University entering into transactions that do not meet the applicable standards, or with entities who may be suspended or debarred from receiving payments from federal funds. Repeat finding – No Recommendation – We recommend the University review their current control policies and procedures, and ensure controls are designed and implemented that satisfy the requirements outlined in 2 CFR 200.318 through 200.327 and 2 CFR 180.220. Views of responsible officials and planned corrective actions – Heritage University agrees with the recommendation and is reviewing its current procurement policies, procedures, and internal controls as they relate to purchases made with federal funds.