Finding Text
Finding 2022-003: Compliance with U.S. Government Terrorism Requirements Federal Programs: All Programs Criteria: The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001 was enacted in order to deter and punish terrorist acts in the United States and around the world and to enhance law enforcement investigatory tools. Executive Order (EO) 13224, which was signed into law during 2001, provides a means by which to disrupt the financial support network for terrorists and related organizations by authorizing the U.S. Treasury, in consultation with other U.S. Government agencies, to designate and block the assets of foreign individuals and entities that commit, or pose a significant risk of committing, acts of terrorism. Condition: During our audit, we noted instances in which the Consolidated Entity did not perform, or did not maintain proper support to demonstrate that it performed, terrorist screening of its contractors, vendors, employees, etc. in accordance with the above-noted requirements. We also noted instances in which screenings were performed after the fact or were not updated in the current year. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. This is especially crucial based on the fact that the Consolidated Entity is funded almost entirely by grants awarded from the U.S. Government. Cause: The Consolidated Entity does not have policies and procedures in place with respect to these requirements. Effect or Potential Effect: The Consolidated Entity could inadvertently contract with and/or make payments to vendors, suppliers, employees, subcontractors and subrecipients who have been disbarred, suspended or otherwise excluded from receiving Federal funds. Questioned Costs: None noted. Context: The Consolidated Entity failed to consistently perform and/or properly document its due diligence with respect to these requirements. Identification as a Repeat Finding: 2021-002 Recommendation: Accordingly, we recommend that the Consolidated Entity develop a formal policy with respect to this requirement to ensure screening processes are conducted properly, timely and that the process is properly documented. This policy should relate to transactions in the United States and internationally (i.e., in Prague and the various bureaus). Furthermore, management should regularly communicate these policies and procedures to all employees, and it should emphasize the importance of maintaining full compliance with U.S. Government ??anti-terrorism? provisions.