FAC Explorer

Finding 394952 (2023-003)

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Requirement
I
Questioned Costs
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Year
2023
Accepted
2024-04-28
Audit: 304813
Organization: Southwestern Adventist University (TX)
Auditor: Gilliam Wharram & CO PC

AI Summary

  • Core Issue: SWAU lacks procedures to prevent contracting with suspended or debarred parties, violating federal compliance requirements.
  • Impacted Requirements: Noncompliance with 2 CFR Part 180, which mandates grantees to establish prohibitive measures against suspended or debarred entities.
  • Recommended Follow-Up: Management should create and implement a written procedure to ensure compliance with prohibitions against doing business with debarred or suspended parties.

Finding Text

Information on the federal program: Higher Education Institutional Aid - Hispanic-Serving Institutions – Science, Technology, Engineering, or Mathematics and Articulations Programs (Assistance Listing number 84.031C); United States Department of Education; Award Year 2022-23; Compliance Requirement – Procurement and Suspension & Debarment; Type of Finding – Material Noncompliance. Criteria: 2 CFR Part 180 requires that grantees establish procedures that prohibit the entity from contracting with or making subawards to parties that are suspended or debarred by the federal government. Condition: SWAU’s internal control policies and procedures do not address the prohibition of doing business with suspended or debarred parties. Cause: Although SWAU was notified of this requirement in two previous audit years, audit follow-up procedures were not put in place due to management personnel changes. Effect: Goods or services for the grant could have been provided by a debarred or suspended party, in violation of federal regulations. Questioned Costs: n/a for this finding. Context: Current year goods and services totaled $542,779 for this grant. For the nine goods and services disbursements we tested, totaling $492,896, we searched the federal list of debarred/suspended parties and did not find any of them listed. Recommendations: Management should immediately implement a written procedure that prohibits doing business with debarred or suspended parties and includes steps to ensure compliance with that prohibition. Responsible Official’s Response and Corrective Action Planned: see corrective action plan.

Corrective Action Plan

Corrective Action: The University has implemented the following written policy: Under Presidential Executive Order 12549 and Executive Order 12689, Southwestern Adventist University may not contract with parties listed on the General Services Administration's System for Award Management (SAM). SAM identifies (via active exclusions) entities that have been debarred, suspended, or excluded from receiving federal contracts, subcontracts, or federal assistance and benefits. In compliance with the Code of Federal Regulations (CFR) Section 180.300, the University includes suspension/debarment provisions in its contracts. By accepting the University’s contracts, the contractor is certifying that, to the best of its knowledge, the contractor and/or any of its principals are not suspended or debarred. Contact Person: Gabriel Morales-Burgos, Assistant Vice President for Financial Administration Completion Date: Completed, 3/26/2024

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $4.07M
84.063 Federal Pell Grant Program $1.67M
84.031 Higher Education_institutional Aid $596,567
84.033 Federal Work-Study Program $136,300
84.007 Federal Supplemental Educational Opportunity Grants $90,034
84.425 Education Stabilization Fund $31,861
15.364 Competitive State Wildlife Grant $17,179