Finding Text
2023-002 Internal Control over Compliance and Compliance with Procurement Requirements
See Schedule of Findings and Questioned Costs for chart/table.
Criteria or Specific Requirement: In accordance with §200.318(a), General Procurement Standards, the non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, §200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to 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. All procurement transactions must be conducted in a manner providing full and open competition consistent in accordance with §200.319 and must be performed using the appropriate procurement method as outlined in §200.320.
Condition: During the audit, we noted PSI management actively works with its country offices to address the importance of tracking transactions using a systematic approach that require procurement procedures to be completed. A purchase order tracking method exists; however, when BDO was provided a listing of procurements that was determined to be incomplete. Management ultimately was able to provide a complete listing after additional investigation and analysis. The direct and pass-through awards listed above were the impacted awards for both major programs.
Questioned Costs: There are no questioned costs.
Context: This is a condition identified based on our review of the internal control for generating a complete procurement population. The sampling of the compliance area would have been incomplete if BDO utilized the original listing provided by PSI.
Cause: PSI personnel did not adhere to PSI’s documented policies and procedures for tracking purchases and ensuring a complete population for testing.
Effect: Failure to generate a complete and accurate procurement listing could indicate an issue in which items do not follow the procurement process. Failure to perform procurement procedures in accordance with PSI’s documented policies and Procurement Procedures as outlined in the Uniform Administrative Requirements could result in the procurement being disallowed.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management refine their procurement tracking method by clarifying established policies and procedures to create more consistency across PSI’s international office locations.
Views of Responsible Officials: PSI management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.