Finding Text
Federal Agency: Department of Treasury
Assistance Listing Number and Title: 21.027 – Coronavirus State and Local Fiscal Recovery Funds
Funding Year(s): 2023-2026
Criteria: Per 2 CFR §200.318, General procurement standards, the entity must establish policies for procurement of equipment, real property and other services funded by federal funds. The procurement records and files for purchases in excess of the micro purchase threshold shall include at a minimum the following items: the basis for contractor selection, justification for lack of competition when competitive bids are not obtained, and basis for award cost or price. In addition, award recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contractor registry. To ensure this is done, recipients should utilize the Excluded Parties List System website.
Condition/Context: For our sample of one (representing the entire population), there was no documentation of policies and procedures for procurement of equipment, real property and other services funded by federal funds. We determined for this program that rate quotations and rationale for limited competition was not retained for the vendor. It was also determined that there was no documentation retained regarding verification of vendor suspension or debarment for the vendor.
Questioned Costs: None noted.
Cause: The entity has written policies for construction procurements, including requirements to obtain at least 2 competitive bids for projects over $5,000 and two proposals for architectural services over $100,000. The entity’s policies also require use of American Institute of Architects contract agreements for construction projects among other requirements. However, the entity does not have policies and procedures designed for procurements under the Uniform Guidance, and therefore, there is not a formal process established to document the performance of such controls. We note that inadequate controls could result in a reasonable possibility that the entity would not be able to detect and correct noncompliance in a timely manner.
Effect: Costs charged to federal awards without appropriate documentation of procurement policies and processes may be subject to disallowance.
Repeat Finding: No.
Recommendation: We recommend developing written procurement policies in accordance with the Uniform Guidance and implementing a system of review and approval controls to complement the design of processes over the procurement, suspension, and debarment compliance requirements. In addition, we recommend retaining documentation regarding procurement decisions including rate quotations and verification of vendor suspension and debarment checks.
Views of Responsible Officials: Management notes the details of this finding and the resulting material weakness. Management will enact processes outlined in our Corrective Action Plan to correct this deficiency in the future.