Finding Text
Finding 2023-001: Procurement Policy
Information on the Federal Program: All
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non
Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and
the terms and conditions of the Federal award. These internal controls should be in compliance with
guidance in Standards for Internal Control in the Federal Government issued by the Comptroller
General of the United States or the internal Control Integrated Framework, issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR
§200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail
the history of procurement. These records will include, but are not necessarily limited to, the
following: Rationale for the method of procurement, selection of contract type, contractor selection or
rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D
200.319 Procurement Standards. All procurement transactions for the acquisition of property or
services required under a Federal award must be conducted in a manner providing full and open
competition consistent with the standards of this section and §200.320. The non-Federal entity must
have written procedures for procurement transactions."
Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must
maintain records sufficient to detail the history of procurement. These records will include, but are not
necessarily limited to, the following: Rationale for the method of procurement, selection of contract
type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter
II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the
acquisition of property or services required under a Federal award must be conducted in a manner
providing full and open competition consistent with the standards of this section and §200.320. The
non-Federal entity must have written procedures for procurement transactions.
Condition: During our testing performed over procurement and through inquiries with management,
we noted the Organization does not have a formally documented procurement policy in place that is
consistent with 2 CFR §200.318(a).
Cause: Management has not formalized and implemented an official organizational procurement
policy.
Effect or Potential Effect: An official procurement policy will outline specified thresholds for which
procurement is required, required documentation needed for each threshold, and individuals
responsible for ensuring procurement is performed in all required circumstances. When no policy is
in place, there is a risk that procurement would not be performed, or adequate documentation would
not be obtained, when required.
Questioned Costs: None noted.
Context: We noted that the Organization does not have a documented procurement policy in effect.Identification as a Repeat Finding, if Applicable: Not a repeat finding.
Recommendation: We recommend that management formalize and implement an official
procurement policy. This policy should include thresholds for which various levels of procurement are
required. The policy should also include what documentation is required for each level of
procurement. Additionally, the policy should specify individuals responsible for conducting
procurement, and approving the final selection.