Finding Text
Finding 2023-003: Use of Sole-Sourced Justification for Procurement
Federal Programs: All ProgramsCriteria: Under Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance)
Section 200.320(f) “Methods of procurement to be followed”, procurements by noncompetitive
proposals (i.e. sole-sourced justification) may be used only when one or more of the following
circumstances apply:
The item is available only from a single source;
The public exigency or emergency for the requirement will not permit a delay resulting from
competitive solicitation;
The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals
in response to a written request from the non-Federal entity; or
After solicitation of a number of sources, competition is determined inadequate.
Condition: Our audit work over various expenses disclosed instances of consultants and vendors
hired under the sole-sourced justification method of procurement. Although the expenses were
properly supported, the rationale for several sole-sourced selections was not properly documented
and/or not always appeared to be reasonable.
Cause: The Consolidated Entity was not in full compliance with sole-sourced justification requirements,
as stated above, during the year ended September 30, 2023.
Effect or Potential Effect: The Consolidated Entity could enter into contractual arrangements
whereby they are not receiving the best value for the organization and/or in which there exists conflicts
of interest. Ultimately, transparency with respect to these transactions could be compromised if the
proper procurement actions are not followed.
Questioned Costs: None noted.
Context: The Consolidated Entity failed to consistently document its justification with respect to solesourced
according to the above-noted requirements.
Identification as a Repeat Finding: 2022-004
Recommendation: We recommend that the Consolidated Entity limit its use of sole-sourced
justification based on the above-noted requirements. In cases where sole-sourced is appropriate, we
recommend that the actions (or lack of actions) be properly and fully documented. The importance in
maintaining a record of each procurement action is to support the Consolidated Entity’s due diligence
process. We also believe this process helps identify any actual or potential conflicts of interest with
prospective vendors and contractors.