Finding Text
Assistance Listing #: 93.243
Criteria: In accordance with the Uniform Guidance, recipients who receive federal funding shall fully comply with Subpart C of 2 CFR Part 180, which requires nonfederal entities to verify that the person/entity with whom you intend to do business is not excluded or disqualified, if the expected payments are equal to or exceed $25,000.
A non-federal entity has three options for performing this verification: 1) checking SAM exclusions; 2) collecting a certification from that person; or 3) adding a clause or condition to the covered transaction with that person.
Condition: During fiscal year 2023, the Organization contracted with several vendors for products and services who were paid more than $25,000. There was no evidence documenting that these vendors were checked for suspension and debarment prior to payment.
Cause: Per inquiry, checks had been performed, but not retained. During the audit and subsequent to year-end, management performed verifications and no vendors were found to have been suspended or debarred.
Effect: Without verifying whether vendors are suspended or debarred prior to payment, the Organization faces a heightened risk that they are expending federal dollars to excluded parties.
Questioned Costs: N/A
Repeat Finding: Yes
Recommendation: We recommend the Organization perform and document each verification on vendors over $25,000 prior to funds being disbursed. An alternative would be for the standard contract to address suspension and debarment and obtain the certification from the vendors at the time the contract is executed.
Response: NFFCMH now performs and documents verification on all vendors and subcontractors. This practice has been implemented prior to the completion of the FY 2023 audit.