Finding Text
2022-002 National Endowment for the Arts Promotion of the Arts Partnership Agreements, 45.025 Procurement, Suspension and Debarment, and Subrecipient Monitoring Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 45.025 on the Schedule of Expenditures of Federal Awards Criteria: Uniform Guidance set forth the procurement, suspension and debarment, and subrecipient monitoring standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required depending on the amount of the transaction. Condition: In our testing of procurement, suspension and debarment, and subrecipient monitoring, it was identified that the Organization does not check for suspension and debarment before signing subawards with subgrantees. Cause: Lack of understanding of all of the specific requirements under the Uniform Guidance that controls were not adequately designed to ensure compliance with all of these requirements. Effect: By not reviewing the suspension and debarment before signing a subaward, the Organization could grant funds to a subrecipient that was suspended or debarred and need to void the subgrant award. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 60 transactions out of 934 total transactions was selected for testing. Required documentation to satisfy suspension and debarment prior to entering into a subgrant was not performed for all 60 of the items selected. Repeat Finding from Prior Year: No Recommendation: We recommend that management maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to ensure vendors are not suspended or debarred prior to signing the subaward. Views of Responsible Officials: Management agrees with this finding.