Finding Text
2022 ? 001: Suspension and Debarment Federal Agency: U.S. Department of Agriculture Federal Program Title: Foreign Market Development Cluster Assistance Listing Number: 10.601, 10.618 Award Period: January 1, 2022 ? December 31, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires that when a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During testing of a sample of six vendors subject to the Association?s Suspension and Debarment controls, we noted six instances where there was a lack of evidence that the Association verified that the vendors were not suspended or debarred. Questioned Costs: None. Context: Six vendors, out of our sample of six, were found to have no evidence of verification that the vendor was not suspended or debarred. We did later verify that the vendors were not suspended or debarred. Cause: Per discussion with management and the outsourced compliance firm, the Association did verify that the vendors were not suspended or debarred; yet, the documentation supporting such verification could not be located. As such, the Association could not demonstrate that verification procedures were performed. Effect: Without maintaining supporting evidence that suspension and debarment procedures were performed over all applicable vendors, the Association cannot support that the federally required procedures were performed and could potentially contract with vendors whom are suspended or debarred, causing the Association to be out of compliance with regulations. Repeat Finding: Yes. Recommendation: We recommend that the Association maintain evidence of suspension and debarment procedures to support compliance with federal regulations and to ensure that all potential vendors are not suspended or debarred. Views of Responsible Officials: There is no disagreement with the audit finding.