Finding Text
Finding 2022-005 – Procurement Policies
Assistance Listing #: ALL
Criteria: The Uniform Guidance, 2 CFR Subpart D, requires that all non-federal entities must follow the procurement standards as set forth in parts §200.318 through §200.327 and the non-federal entity’s documented procurement procedures must conform to these procurement standards.
Condition: The Organization has general policies and procedures that broadly address procurement, however, the written policies do not comply with the requirements of the Uniform Guidance.
The Organization’s procurement policies have been adopted using a model applicable to a commercial entity with multiple references to the Federal Acquisition Regulation (FAR) and its standards, rather than a non-profit organization subject to the Uniform Guidance.
Cause: As noted above, fiscal year 2022 is the Organization’s first Single Audit and It appears the Organization is not fully aware of the applicable requirements.
Effect: The Organization is not in compliance with the requirements of the Uniform Guidance and its relative procurement standards.
In addition, since the Organization is not following the procurement guidance as specified, they are at a heightened risk that they will procure goods and services outside of the allowed scope of the Uniform Guidance, not follow proper procurement steps to selection, and/or not maintain proper procurement history, etc.
Questioned Costs: N/A
Repeat Finding: No
Recommendation: We recommend management update its procurement policies and procedures to comply with the requirements of the Uniform Guidance.
Response: The Organization is generally identified and approached by Federal agencies, or prime contractors having or considering federal agencies, to utilize grant funding for NFFCMH contracts. The Organization works with trusted partners, each having a unique or specialized forte within the grant requirements, to assemble a joint team of providers. Many of these partners are, due to repeated utilization and unique recognition within their field, uniquely qualified, or the true only option, for their areas of expertise. The Organization will revise the procurement policy to comply with Uniform Guidance, as opposed to the Federal Acquisition Regulations.