Finding Text
Criteria or specific requirement: Federal regulations (2 CFR 180.300) require that grantees have controls in place to verify that vendors are not suspended or debarred prior to entering into contracts for goods and services exceeding $25,000. Condition: For four of the four contracts tested, there was no evidence of verification from sam.gov having been obtained to verify vendors were not suspended or debarred prior to conducting business. There was also no evidence in the Organization’s contract with the vendor that the appropriate language had been included. Context: Of the ten vendors that had expenditures greater than $25,000, we selected four vendors for procurement testing. Effect: The Organization could be transacting with parties that are suspended or debarred and may be subject to questioned costs or other sanctions from funding agencies. However, during the course of the audit, we verified these vendors were not previously suspended or debarred. Cause: There were ineffective controls in place during the period, along with lack of management oversight. Repeat finding: Yes, this is a repeat finding of 2024-001 from the prior year’s audit. The prior corrective action plan was not fully implemented. As the prior year audit was completed subsequent to June 30, 2025 the Organization did not have time to implement the corrective action plan. Recommendation: We recommend that the Organization establish and implement controls to verify, prior to entering into covered transactions, that prospective vendors are not suspended, debarred, or otherwise excluded from participation in Federal awards. The Organization should establish a consistent verification method, such as checking SAM.gov Exclusions, obtain a certification from the vendor or include an appropriate clause or condition in the transaction, and retain evidence that the verification was performed. Views of responsible officials: Management agrees with the auditor recommendation.