Federal Program Information:
Funding Agency: U.S. Department of Agriculture
Title: USDA School Breakfast Program and National School Lunch Program
FAL Number: 10.553 and 10.555
Passthrough: New Mexico Public Education Department
Award Year: 2023
Criteria: §200.213 Suspension and debarment.
Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders
12549 and 12689, 2 CFR part 180. These regulations restrict awards, sub awards, and contracts with certain parties that are debarred,
suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.
§200.317 Procurements by states.
When procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for
procurements from its non-Federal funds. The state will comply with §200.322 Procurement of recovered materials and ensure that
every purchase order or other contract includes any clauses required by section §200.326 Contract provisions. All other non-Federal
entities, including sub recipients of a state, will follow §§200.318 General procurement standards through 200.326 Contract
provisions.
§200.318 General procurement standards.
(a) The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and
tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this
part.
(b) Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions,
and specifications of their contracts or purchase orders.
APPENDIX II TO PART 200—CONTRACT PROVISIONS FOR NON-FEDERAL ENTITY CONTRACTS UNDER FEDERAL AWARDS
In addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal
entity under the Federal award must contain provisions covering the following, as applicable.
(H) Debarment and Suspension (Executive Orders 12549 and 12689)—A contract award (see 2 CFR 180.220) must not be
made to parties listed on the government-wide exclusions in the System for Award Management (SAM), in accordance with the
OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp., p. 189) and 12689 (3 CFR part
1989 Comp., p. 235), “Debarment and Suspension.” https://www.sam.gov/portal/public/SAM/ SAM Exclusions contains the
names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or
regulatory authority other than Executive Order 12549.
Condition: During our testing of single audit disbursements, we identified a vendor which would meet the requirement of verifying
that the vendor was not suspended or debarred or otherwise excluded from receiving the contract which was funded through Federal
dollars. The vendor received more than $25,000 in payments from the District from Federal grant sources. The vendor is not currently
suspended or debarred from receiving Federal contracts; however, the District did not have proper internal controls in place to verify
this prior to the purchase.
The District did make improvement in this area for all new work during the year. However, these projects were completed in the
year under audit before the District became aware of the requirements above and could not retroactively cure the errors.
Cause: District personnel did not verify that vendors which meet the $25,000 thresholds are not suspended, debarred, or otherwise
excluded from participating in contracts funded through Federal awards due to a misunderstanding of staff personnel regarding this
requirement.
Effect: The District is not in compliance with Federal regulations related to the grant and could put funding in jeopardy or require
the District to reimburse the program for improper grant distributions. Auditor’s Recommendation: We recommend the District establish a policy and implement procedures regarding large purchases related
to Federal grants to insure that no vendors who are suspended, debarred, or otherwise excluded from participating in transactions
funded through Federal grants are used. As identified above, there are several methods in which the District can verify vendors are
not suspended or debarred. The District may have the vendor provide an annual certification that it is not currently suspended,
debarred, or otherwise prevented from receiving Federal dollars. In other occasions in which a single purchase is going to be made,
the purchasing procedures should include looking up the vendor on the GSA website, printing a copy of the verification, and placing
it in the file with the purchase order. The District has options, and it should establish what method is the least intrusive but also
effective in complying with the requirements of the Uniform Grant Guidance.
Responsible Official’s Plan:
Specific corrective action plan for finding:
The Grants Finance Department, Federal Grants Department, Operations Department along with the Purchasing
Department will review Vendors that are issued requisitions at each approval level to assist in catching $25K or more
for Suspension and Debarment. A printed document from SAM.GOV verifying eligibility for Requisitions over $25K
will be attached. Infinite Visions is set up to alert originators entering requisitions over $25,000 to contact Purchasing
or Grants Department to check the vendor in SAM.GOV to confirm the vendor is vetted to comply with federal
regulations.
At the initial setup of new vendors, the Purchasing Department will review vendors in SAM.GOV. A printed document
from SAM.GOV verifying eligibility of vendor will be attached to the vendor file.
Timeline for completion of corrective action plan:
The process was implemented immediately upon awareness of the finding and we are hopeful that all issues have been
resolved by FY24.
Employee position(s) responsible for meeting the timeline:
Grants Specialists, CPO, Finance Specialists, Purchasing Specialist, Federal Grants Coordinator, Federal Grants
Specialist