Finding 20972 (2022-005)

Significant Deficiency

Requirement

Questioned Costs

Year

2022

Accepted

2023-01-23

Audit: 22784

Organization: Anne Arundel County Food Bank, Inc. (MD)

Auditor: Gross Mendelsohn & Associates P A

AI Summary

Core Issue: The purchasing policy lacks provisions for checking if vendors or subrecipients are suspended or debarred, leading to potential compliance risks.
Impacted Requirements: This oversight violates OMB compliance requirements and 2 CFR 200.214, which mandate monitoring for suspension and debarment in covered transactions.
Recommended Follow-Up: Management should establish procedures for verifying vendor status against suspension lists and conduct annual checks on recurring vendors to ensure compliance.

Finding Text

Statement of Condition: During our testing of internal control policies and procedures over procurement and suspension and debarment, we noted that management had established a formal purchasing policy, however, the policy did not address suspension and debarment and no procedures were established to ensure that purchases or subawards made under covered transactions were not made to parties that were suspended or debarred. Criteria: In accordance with the OMB compliance requirements and the Code of Federal Regulations (2 CFR 200.214), management must create and monitor internal control policies and procedures to ensure that when the organization enters into a covered transaction with a vendor or subrecipient, policies and procedures are performed to ensure that the vendor or subrecipient is not suspended or debarred or otherwise excluded from participating in the transaction. Cause: Management did not have the proper internal control policies and procedures to monitor vendors or subrecipients nor did they have a proper understanding of suspension and debarment requirements under the OMB compliance requirements and the Code of Federal Regulations (2 CFR 200.214). Effect: As a result, the client was not in compliance with the suspension and debarment attribute as required. Fortunately, no vendors utilized during the year ended June 30, 2022 were listed as suspended or debarred. Recommendation: We recommend that management develop procedures to ensure suspension and debarment procedures are performed for all new vendors and subrecipients. In addition, recurring vendors and subrecipients should be monitored annually to ensure there is no suspension or debarment of that vendor or subrecipient. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at www.sam.gov, (2) collecting a certification from the entity, or (2) adding a clause or condition to the covered transaction with that vendor or subrecipient.

Corrective Action Plan

Views of Responsible Officials and Planned Corrective Actions: In December 2021, the Organization?s Board of Directors approved and adopted a procurement policy for the organization. The organization acknowledges that there is an opportunity for improvement of this policy, specifically to address suspension and debarment, and to establish procedures to ensure that purchases and subawards made under covered transactions are not made to parties that are suspended or debarred. Management has created a Vendor Monitoring Tracking spreadsheet and effective November 1, 2022, this spreadsheet will be maintained by the Bookkeeper to document that new and existing vendors are monitored to verify that the vendor is not debarred, suspended, or otherwise excluded or ineligible for participation in Federal assistance programs or activities. Vendor status will be verified before using a new vendor and on an annual basis for existing vendors. Documentation of findings will be copied, saved, and retained. On at least a quarterly basis, Management will review the vendor monitoring tracking spreadsheet and documentation of findings. The Organization?s procurement policy will be updated by November 1, 2022, to reflect the adoption of this procedure to address suspension and debarment.

Other Findings in this Audit

20971 2022-004

Significant Deficiency
20973 2022-004

Significant Deficiency
20974 2022-005

Significant Deficiency
597413 2022-004

Significant Deficiency
597414 2022-005

Significant Deficiency
597415 2022-004

Significant Deficiency
597416 2022-005

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
21.027	Coronavirus State and Local Fiscal Recovery Funds	$1.39M
10.569	Emergency Food Assistance Program (food Commodities)	$796,074
10.568	Emergency Food Assistance Program (administrative Costs)	$118,665
97.024	Emergency Food and Shelter National Board Program	$7,545