Finding Text
2026-002 Suspension and Debarment (repeat of finding 2025-004) Program Information Federal Organizations U.S Department of Agriculture (passed through California Department of Public Health) Assistance Listing Numbers 10.557 WIC Special Supplemental Nutrition Program for Women, Infants, and Children Award Numbers 25-10160, 22-10237 A05 Criteria Title 2 CFR 200.214 and Title 2 CFR 180.300 require that organizations “verify that the person with whom you intend to do business is not excluded or disqualified” before entering into covered transactions (procurement contracts, purchase orders, or agreements greater than or equal to $25,000) with persons or vendors. [ ] Compliance Finding [X] Significant Deficiency [ ] Material Weakness Condition The Organization entered into covered transactions without verification that vendors/contractors were not excluded from doing business with the federal government. This finding appears to be a systemic issue. Cause The Organization did not maintain documentation evidencing its compliance with its policy to verify that persons or entities contracted with were not listed on the exclusions list prior to entering into the contracts or purchase agreements. Suspension and debarment check were performed, but not until after the prior year’s audit was completed and this issue was identified. Effect The Organization may have entered into covered transactions with persons who have been suspended or debarred. Questioned Costs None noted. Context We tested four vendors with “covered transactions” under assistance listing number 10.557. All vendor suspension and debarment checks were performed after the initial transaction had already been entered into, due to the timing of the transaction compared to the timing of the completion of the prior year’s audit. Recommendation We recommend the Organization perform vendor checks prior to entering into procurements meeting the covered transaction criteria and retain documentation that the checks were performed and when they were performed. In addition, we recommend that the Organization update these checks on an annual basis. Views of responsible officials and planned corrective action Management concurs with Finding 2026-002 and reports that the related corrective actions have been completed. The finding carried over from the prior audit period and has been resolved by management through implementation of the vendor verification and documentation procedures described in the corrective action outlined on page 39.