Finding Text
CRITERIA Per 2 CFR 200.318(a), the auditee must establish and maintain effective internal control over the federal award the provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations and conditions of the federal award. 2 CFR 200.318(c)(1) provides that the auditee must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. 2 CFR 200.319(c) establishes that the auditee must have written procedures for procurement transactions. According to ? 180.300 of Subpart C ? Responsibilities of Participants Regarding Transactions Doing Business, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking System for Award Management (SAM.gov) Exclusions; (b)Collecting a certification from that person; (c) Adding a clause or condition to the covered transaction with that person. CONDITION During our control and compliance test work over procurement we noted the following: 1- In testing three of the consultants used, all three had contracts that exceeded $25,000 but were not tested for suspension and debarment. 2- In testing three of the consultants, used, all three had contracts that exceed the Simplified Acquisition Threshold (SAT) of $250,000, but no sealed bids, proposals, or documentation of sole source was performed. (a) Through further inquiry, the written micropurchase policy of $50,000 was not self-certified. (b) Through further inquiry, small purchases that exceed micropurchase policy but are less than SAT ($250,000) did not obtain quotations. CAUSE Proper internal control procedures are not maintained to ensure federal procurement requirements are met. EFFECT The Organization is not in compliance with federal requirements when entering into procurement contracts as well as not meeting suspension and debarment requirements by potentially contracting with a suspended or debarred vendor. QUESTIONED COSTS None CONTEXT The Organization?s written procurement policy does not address suspension and debarment. In addition, the Organization did not perform a self-certification to lower its micropurchase threshold. The Organization did not maintain proper documentation for selected vendors that were over thresholds. RECOMMENDATION We recommend that the Organization update its procurement policy and adhere to the following: 1 For all vendors with purchases of $25,000 or more, check SAM.gov website for suspension and debarment. 2. Perform an annual self-certification that includes a justification, clear identification of the threshold, and supporting documentation to allow for $50,000 as the micropurchase limit 3. For all vendors/contractors with procurements for goods or services over the micropurchase limit, but under the SAT limit, obtain a number of reasonable quotations. 4. For all vendors/contractors with procurements for goods or services over the SAT limit provide: o Sealed bids o Proposals o Documentation of single source o Express authorization from grantor MANAGEMENT VIEW AND CORRECTIVE ACTION PLAN 1. FHI will search SAM.gov for suspension and debarment of contractors and keep those records on file. FHI will perform this search annually as the contractors registration expires and is renewed. 2. FHI will perform an annual self-certification that includes a justification, clear identification of the threshold, and supporting documentation to allow for $50,000 as the micropurchase limit.