Finding 396417 (2023-004)

Legal Services Corporation FFAL #09-542026 Legal Services Corporation – Basic Field Grant Procurement Significant Deficiency in Internal Control over Compliance Criteria: 45 CFR 1631 requires that a non-Federal entity must use its own documented procurement procedures which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal law. Condition: Our testing detected one instance in which the transaction exceeded the Organization’s micro and small purchase threshold of $25,000, requiring rate quotes and a written evaluation why the vendor was chosen, however, this was not completed. Cause: There was a lapse in oversight of the internal control process ensuring rate quotes are obtained and written evaluation was completed, detailing the Organization’s considerations over the procurement process. Effect: Without obtaining rate quotes and completing a written evaluation detailing the history of procurement, demonstrating the program complies with laws, regulations, and other compliance requirements is difficult. Questioned Costs: None reported based on assessment of comparative pricing readily available. Context/Sampling: A nonstatistical sample of 60 disbursements out of more than 250 disbursements were selected for testing. Out of the 60 disbursements, one item exceeded the Organization’s micro and small purchase threshold. Repeat Finding from Prior Year: No. Recommendation: We recommend management review the internal control process to ensure procurement considerations are documented and retained. Views of Responsible Officials: Management is in agreement.