FAC Explorer

Finding 2609 (2022-002)

Material Weakness
Requirement
I
Questioned Costs
$1
Year
2022
Accepted
2023-11-28
Audit: 4379
Organization: Native Village of Kivalina (AK)
Auditor: Brad Cage CPA

AI Summary

  • Core Issue: NVK failed to properly document a significant purchase over $5,000, violating procurement policies.
  • Impacted Requirements: Non-compliance with 2 CFR Section 200.320, which mandates obtaining competitive bids for large purchases.
  • Recommended Follow-up: Management should reinforce training on procurement policies to ensure all material purchases are documented and compliant.

Finding Text

DURING MY AUDIT I NOTED THAT NVK DID NOT PROPERLY DOCUMENT THE PROCUREMENT OF ONE PURCHASE OVER 5K FOR THE DOT, COVID-19, CSLFR GRANT PER 2CFR SECTION 200.320 NVK'S STAFF MUST FOLLOW PROCUREMENT POLICIES AND OBTAIN COMPETITIVE BIDS FOR SIGNIFICANT PURCHASES. THE PURCHASE WAS IN THE AMOUNT OF $933,475. I TESTED ONE OF THE ONE ITEMS IN EXCESS OF THE PROCUREMENT THRESHOLD. INTERNAL CONTROLS WERE NOT IN PLACE TO ENSURE THAT PRIOR TO PURCHASE, PROPER PROCURMENT WAS PERFORMED, DOCUMENTED, AND RETAINED. MANAGEMENT SHOULD ENSURE THAT ALL STAFF KNOW THAT ALL MATERIAL PURCHASES MUST BE PROPERLY PROCURED AND DOCUMENTATION RETAINED. THIS WAS NOT A REPEAT FINDING.

Corrective Action Plan

THE COUNCIL WILL ENSURE THAT ALL FUTURE PROCUREMENTS CORRECTLY USE AND RETAIN A PROCUREMENT SHEET WHICH DOCUMENTS THE ITEM PURCHASED, THE BIDS RECEIVED, AS WELL AS THE ANALYSIS OF THE REASONS FOR THE WINNING BID. THE WINNING CONTRACTOR/VENDOR WILL BE SEARCHED ON THE SAM WEBSITE TO DETERMINE THAT THEY ARE NOT SUSPENDED/DEBARRED.

Categories

Questioned Costs Procurement, Suspension & Debarment

Other Findings in this Audit

  • 2610 2022-003
    Material Weakness Repeat
  • 579051 2022-002
    Material Weakness
  • 579052 2022-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $2.55M
90.100 Denali Commission Program $229,172
15.020 Aid to Tribal Governments $158,564
14.867 Indian Housing Block Grants $118,291
66.926 Indian Environmental General Assistance Program (gap) $104,794
21.032 Local Assistance and Tribal Consistency Fund $71,943
15.156 Cooperative Landscape Conservation $47,320
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $28,400
20.205 Highway Planning and Construction $858