Finding Text
Finding 2022-006: Procurement
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-
Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the
terms and conditions of the Federal award. These internal controls should be in compliance with
guidance in Standards for Internal Control in the Federal Government issued by the Comptroller
General of the United States or the internal Control Integrated Framework, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must
maintain records sufficient to detail the history of procurement. These records will 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. Title 2, Subtitle A Chapter II
Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition
of property or services required under a Federal award must be conducted in a manner providing full
and open competition consistent with the standards of this section and §200.320. The non-Federal
entity must have written procedures for procurement transactions.
These procedures must ensure that all solicitations incorporate a clear and accurate description of the
technical requirements for the material, product, or service to be procured. Such description must not,
in competitive procurements, contain features which unduly restrict competition. The description may
include a statement of the qualitative nature of the material, product or service to be procured and,
when necessary, must set forth those minimum essential characteristics and standards to which it
must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in
accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are
specific circumstances in which noncompetitive procurement can be used. Noncompetitive
procurement can only be awarded if one or more of the following circumstances apply:
1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the
micro-purchase threshold (see paragraph (a)(1) of this section);
2. The item is available only from a single source;
3. The public exigency or emergency for the requirement will not permit a delay resulting from
publicizing a competitive solicitation;
4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive
procurement in response to a written request from the non-Federal entity; or
5. After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing over procurement, we determined that SAMU did not clearly document
the rationale for the method of procurement, selection of contract type, contractor selection or
rejection, and the basis for the contract price. In addition, we noted that vendors did not always have a
signed contract in place to outline the price and nature of services to be provided to SAMU.
Cause: Management did not have effective internal controls in place to ensure that procurement
requirements were adequately documented and retained.
Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in
the Criteria section above, as well as SAMU's internal procurement policy.
Questioned Costs: None.
Context: We noted that items selected for testing did not document the rationale for the method of
procurement, selection of contract type, contractor selection or rejection, and the basis for the contract
price. In addition, there were instances in which vendors selected for testing did not have a signed
contract in place with SAMU.
Identification as a Repeat Finding, if Applicable: Not applicable.
Recommendation: We recommend SAMU retain sufficient procurement documentation to meet the
requirements noted in the Criteria section above.