Finding Text
Finding 2023-002: Procurement, Suspension and Debarment (Material Weakness)
Federal Program: U.S. Department of the Treasury: ALN 21.027
Criteria or Specific Requirement: 2 CFR Section 200.318 requires that the non-Federal entity must
have and use documented procurement procedures, consistent with State, local, and tribal laws and
regulations and the standards of this section, for the acquisition of property or services required under
a Federal award or subaward. The non-Federal entity's documented procurement procedures must
conform to the procurement standards identified in §§ 200.317 through 200.327.
2 CFR Section 200.214 requires that, for covered transactions, a non-Federal entity must verify that
entities are not suspended, debarred or otherwise excluded. This verification may be accomplished by
checking the System for Award Management (SAM) website maintained by the General Services
Administration.
Condition: AHCMC does not have a formal procurement policy which requires full and open
competition for purchases of goods and services. In addition, during the year under audit, AHCMC did
not perform the screening process for all payments made with Federal funds.
Cause: AHCMC did not have polices and procedures in place throughout the year to perform and
maintain documentation of its procurement procedures. In addition, AHCMC did not perform and
maintain documentation of the SAM screening.
Effect or Potential Effect: Failure to perform the proper procurement procedures could result in
disallowance of Federal expenditures based on lack of fair competition. In addition, failure to screen
potential vendors, suppliers, employees, fellows or other non-contracted Federal transactions against
the suspended and debarred list increases the possibility that U.S. Government funds may
inadvertently be provided to individuals or organizations deemed to be excluded parties by the U.S.
Government.
Questioned Costs: None noted.
Context: With a formal procurement policy, AHCMC did not comply with the procurement standards in
the Uniform Guidance. Payments were made throughout the year by AHCMC without performing the
SAM screening process. The SAM screening process was done after the fact during the audit and no
suspended, debarred or otherwise excluded parties were paid Federal funds.
Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: AHCMC should implement a procurement policy that conforms to the Uniform
Guidance. Furthermore, AHCMC should maintain documentation in its files to provide evidence to
support that it followed the procurement policy. In addition, AHCMC should establish internal controls
to ensure documentation is maintained to evidence that it performed the required suspension and
debarment searches on the SAM website.