Finding Text
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Award requires compliance with the provisions of
procurement and suspension and debarment. The Organization should have internal controls designed
to ensure compliance with these provisions.
Condition and Context: During our testing, we noted an instance where the Organization was unable
to locate the procurement files to support sole source justification for procurement transactions.
Questioned costs: N/A
Cause: The Organization lacks established internal controls and procedures over financial grant
management. The Organization did not maintain files related to the procurement process of
expenditures being allocated to a federal grant.
Effect: The lack of internal controls over this compliance requirement provides an opportunity for
noncompliance. The auditor noted instances of material noncompliance. Noncompliance results in
possible Federal funds provided to ineligible vendors.
Recommendation: We recommend that the Organization create an internal policy over the
documentation of sole source/non-competitive bid justification prior to contracting with a vendor using
federal funds.
Management Response: Management has accepted the recommendation and will add language to
the existing Purchasing and Procurement Guidance Policy and Procedure outlining the requirement for
documentation of sole source/noncompetitive bid justification. In instances where the item or service is
only available from one source or competition is deemed inadequate, the Organization will keep written
documentation of justification for sole source. Also, the Organization will educate supervisors on this
policy update at an upcoming training meeting no later than October 31, 2024.