Finding Text
Criteria Pursuant to 2 CFR §200.327 and Appendix II to 2 CFR Part 200, all contracts entered into by a non-Federal entity under a Federal award must contain the applicable contract provisions required by Federal statutes, executive orders, and regulations, as appropriate for the type and amount of the procurement. Condition We noted that the contract executed with Eco-Logical Group, LLC did not include all applicable Federal contract provisions required by Appendix II to 2 CFR Part 200 for contracts funded with Federal awards. Context We tested three contracts entered into by the Academy with non-Federal entities to determine compliance with Federal procurement requirements. Of the three contracts tested, one contract, representing 33 percent of the sample, did not include all required Federal contract clauses. Effect The absence of required Federal contract provisions constitutes noncompliance with Federal procurement requirements. As a result, the Academy may be exposed to increased risk of disputes, enforcement challenges, or other compliance issues related to the administration of Federal awards and limit the Academy's ability to enforce Federal requirements. Cause Management did not implement adequate review procedures to ensure that contracts funded, in whole or in part, with Federal award funds contained all applicable contract clauses required by Appendix II to 2 CFR Part 200. Questioned costs None. Recommendation Management should establish and implement procedures to ensure that all contracts funded with Federal awards are reviewed prior to execution for compliance with the applicable contract provisions required by Appendix II to 2 CFR Part 200. In addition, management should maintain documentation evidencing such reviews. Views of Responsible Officials and Planned Corrective Actions Management response is reported in the “Corrective Action Plan” at the end of this report.