Finding 370206 (2022-006)

Material Weakness
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2024-02-22
Audit: 291780
Organization: Africatown Community Land Trust (WA)
Auditor: Brantley Janson

AI Summary

  • Core Issue: The Organization bypassed standard procurement procedures and did not conduct required checks for suspended or debarred vendors.
  • Impacted Requirements: Noncompliance with federal regulations under §200.318 and §200.214 regarding procurement processes and vendor eligibility.
  • Recommended Follow-Up: Update procurement forms to include necessary criteria and implement controls for management review and documentation of vendor checks.

Finding Text

Finding 2022-006 Procurement, Suspension, and Debarment – Material Weakness. Criteria: In accordance with §200.318, the non-federal entity must use its own documented procurement procedures which reflect applicable laws and regulations, provided that the procurements conform to applicable federal law and the standards identified. Additionally, the nonfederal entity must maintain records sufficient to detail the history of the procurement. These records are required to include but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. All procurement transactions must be conducted in in accordance with §200.317 through §200.327. In accordance with §200.214 non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a non-federal entity. Condition: The Organization also has standard procurement procedures in place guiding purchasing decisions. However, due to need for expediency in choosing a contract that is partially funded by the federal award, the board of directors approved waiving the normal bidding process. The Organization also did not perform or document suspension and debarment checks on prospective vendors and subrecipients. Cause: The Organization’s personnel did not ensure to follow documented policies and procedures for selecting a contractor that were in compliance with the CFR 200. Additionally, the Organization did not have adequate internal controls in place to identify the need to ensure a check for suspended or debarred vendors on contractors occurred and was documented prior to entering into those agreements. Effect: Failure to maintain policies for vendor selection process and failure to obtain vendor solicitation for procurements is noncompliance with federal regulations. This leads to the possibility that resources were purchased from vendors who were suspended and/or debarred. Questioned Costs: Unknown Repeat Finding: Not applicable as the Organization is a first time auditee. Recommendation: Standard forms should be updated to incorporate procurement and suspension and debarment criteria for both vendors and subrecipients. Controls should be implemented to ensure that the procurement decisions and suspension and debarment checks are reviewed by an appropriate member of management and are properly stored for future reference. Views of Responsible Official: See Corrective Action Plan.

Corrective Action Plan

Finding 2022-006: Procurement, Suspension, and Debarment – Material Weakness. The buying policy ordering process has been updated to include blocking GSA (Government Services Administration) & HHS (Health & Human Services) disbarred sellers in accordance with SAM (System of Award Management) system. The overall Procurement policy, contracts and forms will be updated to include suspension and debarment language.

Categories

Procurement, Suspension & Debarment Subrecipient Monitoring

Other Findings in this Audit

  • 370204 2022-004
    Material Weakness
  • 370205 2022-005
    Material Weakness
  • 370207 2022-007
    Significant Deficiency
  • 370208 2022-008
    Significant Deficiency
  • 946646 2022-004
    Material Weakness
  • 946647 2022-005
    Material Weakness
  • 946648 2022-006
    Material Weakness
  • 946649 2022-007
    Significant Deficiency
  • 946650 2022-008
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $2.19M