Finding 39718 (2022-002)

Material Weakness
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2023-08-09

AI Summary

  • Core Issue: The organization failed to document procurement transactions for 4 out of 7 tested, violating federal regulations.
  • Impacted Requirements: Federal rules mandate detailed documentation for procurement methods, contractor selection, and pricing rationale.
  • Recommended Follow-Up: Revise procurement processes to ensure compliance with federal documentation requirements for all transactions.

Finding Text

2022 ? 002: Documentation of Procurement Method and Procurement Policy 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 ? Other Matter Criteria or Specific Requirement: Federal regulations require recipients of federal funds to document the history of procurement transactions, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. Federal regulations also specific certain procurement methods that recipients must use in certain circumstances. These regulations allow recipients to utilize a noncompetitive procurement method if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing, we noted that for four out of seven procurement transactions tested the Organization did not have documentation of the history of procurement transaction, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. Questioned Costs: NoneContext: The history of procurement transaction, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price was not documented for four of seven procurement transactions tested. Cause: The Organization stated that documentation of procurement procedures are not required for certain transactions due to the nature of the transaction. Effect: The Organization may not be in compliance with federal regulations for certain procurement transactions. Repeat Finding: No. Recommendation: We recommend that the Organization revise its procurement process so that procurement procedures apply to all transactions using thresholds and procurement methods specified by federal regulations, and maintain documentation required by such regulations. Views of Responsible Officials: There is no disagreement with the audit finding.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 39715 2022-001
    Material Weakness Repeat
  • 39716 2022-002
    Material Weakness
  • 39717 2022-001
    Material Weakness Repeat
  • 616157 2022-001
    Material Weakness Repeat
  • 616158 2022-002
    Material Weakness
  • 616159 2022-001
    Material Weakness Repeat
  • 616160 2022-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.601 Market Access Program $929,048
10.618 Agricultural Trade Promotion Program $368,663
17.502 Occupational Safety and Health_susan Harwood Training Grants $96,803