Finding Text
Finding 2022-002: Significant Deficiency: COVID-19 Education Stabilization Fund, Higher Education Emergency Relief Funds, Procurement, Suspension and Debarment Program: COVID-19 Education Stabilization Fund (ESF) Federal Agency: U.S. Department of Education Pass-Through Entity: Not Applicable Assistance Listing Number: 84.425F Federal Award Number: P425E200445 Federal Award Year: June 30, 2022 Criteria: General procurement standards outlined in 2 CFR 200.318(a) state that a non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to the applicable Federal law and the standards identified by the Uniform Guidance (sections 200.318 ? 200.326). The Uniform Guidance outlines requirements over the proper oversight of contractors, having written standards of conduct for employees involved in contracting, awarding contracts to responsible contractors, maintaining records documenting the history of procurements including cost price analysis, conducting all transactions in a manner which provides full and open competition, having procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded, utilizing the methods of procurement outlined in the Uniform Guidance, and ensuring every purchase order or contract includes the applicable provisions in Appendix II. Condition/Context: The College?s policies and procedures over procurement generally conform to the requirements outlined by the Uniform Guidance. The auditors compared the College?s policies and procedures to the applicable sections of the Uniform Guidance by reviewing two vendors of a total of eleven vendors with expenditure for the ESF funds and obtained the associated supporting documentation for our selections. For one of the vendors, it was determined that the College did not obtain multiple quotes before engaging in the contract. Additionally, the auditors noted that the Institution?s procedures were not followed with regard to ensuring full and open competition, obtaining bids/quotes for the items above the micro-purchase threshold, or retaining documentation for the requirement for verifying for vendor suspension or debarment prior to contracting. The sample was not a statistically valid sample. Cause: The College's policies were not compared to Uniform Guidance to ensure all elements were incorporated prior to entering into a contract with vendors for which federal funds were the source of the expenditure. Additionally, the College?s procedures were not followed appropriately with regard to vendor bids/selection or to check for suspension and debarment of the contractor to be utilized. Effect: The College is at risk of procuring goods and services that are not in compliance with the requirements outlined by the Uniform Guidance, which increases the risk of federal expenditures being used improperly or the College entering into a covered transaction with a vendor that is debarred or suspended. Questioned costs: Unknown Recommendation: We recommend the College revise its policies and procedures to conform to the requirements of Uniform Guidance and ensure procedures and controls are followed for all vendors to verify that a vendor with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Relevant employees should be trained on these new policies and procedures. Response: Vendor in question frequently supplied similar materials to MCAD due to known reliability and price competitiveness. Routine procurement procedures would not require verifying vendor for suspension or debarment. After noting this finding, a search was performed at SAM.gov and no exclusions were found for the cited vendors. Going forward, vendors used for this program will undergo verification before services or materials are contracted.