Finding 34389 (2022-001)

Significant Deficiency
Requirement
I
Questioned Costs
$1
Year
2022
Accepted
2022-11-21
Audit: 32703
Organization: Almond Board of California (CA)
Auditor: Moss Adams LLP

AI Summary

  • Core Issue: Management failed to conduct required competition for MAP contracts, leading to potential overspending and unqualified vendor use.
  • Impacted Requirements: Non-compliance with 7 CFR 1485.29(d)(5) and 2 CFR 200.320(a)(2)(i) regarding vendor selection and procurement processes.
  • Recommended Follow-up: Implement a control system to regularly review vendor procurement status and ensure adherence to federal procurement standards.

Finding Text

Finding 2022-001: U.S. Department of Agriculture ? Foreign Agriculture Service; Market Access Program ? Assistance Listing No. 10.601; Grant period: Year Ended December 31, 2022 Criteria ? In accordance with 7 CFR 1485.29(d)(5), Market Access Program ("MAP") participants are required to conduct an appropriate form of competition every three years on all multi-year contracts that are governed by the contracting guidelines. Condition ? Management did not perform an appropriate form of competition in the timeframe required for costs reimbursed under the MAP. Questioned costs ? There are known questioned costs of $71,301 representing the reimbursements claimed for the vendor during the audit period. No likely questioned costs are noted. Context ? Inspection of procurement documentation showed one out of three vendors subjected to sampling required an adequate number of price or rate quotations from qualified sources to be obtained and assessment to be performed to approve vendor continuance in accordance with the small purchase threshold of 2 CFR 200.320(a)(2)(i). Price or rate quotations were not obtained and a formal assessment was not performed. Of the $3,591,906 of total MAP reimbursements claimed during the year, $133,831 of reimbursements are subject to this procurement requirement, including the known questioned costs of $70,301. Effect ? By not obtaining price or rate quotations from qualified sources, this could result in the utilization of an unqualified vendor, an overspending of grant funding, and questioned costs. Cause ? Management believed the vendor provided specialized services and qualified as a sole source procurement, which does not require a form of competition be performed every three years. Repeat finding - N/A Recommendation ? We recommend management implement a control to review the procurement status of all vendors being reimbursed by federal awards and ensure compliance with the Uniform Guidance and other applicable procurement standards. Management's response ? Management will perform an informal review process that includes obtaining quotes from similar vendors and performing a documented analysis of services and corresponding costs for the fiscal year 2022-23 and every three years going forward.

Corrective Action Plan

To Whom It May Concern, As required by the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), we have provided below our response and corrective action plan addressing the finding in the Report of Independent Auditors on Compliance for the Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance for the year ended July 31, 2022. Response and Corrective Action Plan Finding 2022-001: U.S. Department of Agriculture ? Foreign Agriculture Service; Market Access Program ? Assistance Listing No. 10.601; Grant period: Year Ended December 31, 2022 Cause: Management believed the vendor provided specialized services and qualified as a sole source procurement, which does not require a form of competition be performed every three years. Management Response: Management will perform an informal review process that includes obtaining quotes from similar vendors and performing a documented analysis of services and corresponding costs for the fiscal year 2022-23 and every three years going forward. Sincerely, Sara Geer Associate Director, Finance and Administration Almond Board of California

Categories

Questioned Costs Procurement, Suspension & Debarment

Other Findings in this Audit

  • 610831 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
10.601 Market Access Program $3.59M
10.600 Foreign Market Development Cooperator Program $216,430
10.170 Specialty Crop Block Grant Program - Farm Bill $101,121
10.604 Technical Assistance for Specialty Crops Program $49,106