Finding 391470 (2023-001)

Finding Reference: 2023-001 – I. Procurement, Suspension and Debarment Federal Program Information Federal Agencies: Department of Treasury Awards: Assistance Listing Number 21.027 – COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Periods: July 1, 2021 – June 30, 2023 Description: Incomplete Federal Requirements within Procurement Policies Type of Finding: Compliance and Deficiency in Internal Control Over Compliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Part 200.320 Methods of procurement to be followed states the following: “The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319" regarding the methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Condition As part of our testing over the operating effectiveness of internal controls over the Procurement, Suspension and Debarment assertion for Coronavirus State and Local Fiscal Recovery Funds, we noted that the Corporation did not have a procurement policy that conforms to all applicable Federal law, State and Local Fiscal Recovery Funds Regulations, and the standards contained in the Uniform Guidance, as applicable, when purchasing services with the Coronavirus State and Local Fiscal Recovery Funds. Cause The Corporation did not comply and maintain a procurement policy that conforms to the provisions required by the Uniform Guidance upon receiving such federal funds related to the Coronavirus State and Local Fiscal Recovery Funds program. Effect or potential effect Purchasing of goods and/or servicing with the State and Local Fiscal Recovery Funds may not be in compliance with the Uniform Guidance. Questioned costs Not applicable. Identification of a repeat finding This is a repeat finding of Finding 2022-001 in the prior year. Context The Corporation utilized the funds awarded to their facility to bolster staff and entered into various labor contracts with agency vendors. As a result of the pandemic and related public emergency, there was an unprecedented stress on the labor force and therefore, a high demand and dependency on agency labor. As part of management’s assessment, a competitive solicitation would have resulted in a delay and lack of required and necessary staff. As such, this specific circumstance would allow for noncompetitive procurement. Recommendation The Corporation should update its procurement policy to include the provisions required by the Uniform Guidance for purchasing goods and/or services with federal funds. View of responsible officials The Corporation agrees with the finding and has developed a plan to correct the finding.