Finding Text
United States Department of Treasury
Federal Assistance Listing No. 21.027 American Rescue Plan Act (ARPA)
Significant deficiency over Procurement and Suspension and Debarment
Repeat Finding: No
Condition:
During our audit we noted that procurement documentation was not available to support the
selection of a sole source vendor. Also, we were unable to obtain documentation to support BCI
entering into contractual agreements with vendors who were not debarred or suspended from
doing business with the Federal government.
Criteria:
In accordance with 2 CFR 200.514: (c) Internal control. (1) The compliance supplement provides
guidance on internal controls over Federal programs based upon the guidance in Standards for
Internal Control in the Federal Government issued by the Comptroller General of the United
States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). COSO requires entities to establish and
maintain effective internal controls to achieve operational, reporting and compliance objectives.
Per 2 CFR 200.320 General procurement stands:
(a) Noncompetitive procurement. 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 .(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.
Per 2 CFR 200.318 General procurement stands:
(b) The 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 applicable Federal law and the standards identified in this part.
Per Uniform Guidance, Non-Federal entities are prohibited from contracting with or making
subawards under covered transactions to parties that are suspended or debarred. “Covered
transactions” include contracts for goods and services awarded under a non-procurement
transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or
meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement
transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective
of award amount, are considered covered transactions, unless they are exempt as provided in 2
CFR section 180.215.
Cause:
BCI did not apply the required procurement policy relative to sole source contracts in accordance
with Uniform Guidance. Management also did not complete a review of vendors/contractors to
verify they are not suspended, debarred, or otherwise excluded before contracting.
Effect:
The Organization does not have adequate documentation on whether they have entered into
transactions with eligible entities and is in compliance with Federal guidelines.
Questioned Costs:
Unknown
Recommendation:
We recommend the Organization update and follow their controls to identify vendors that should
go through the procurement process. We also recommend the Organization follow their process
to verify that entities are not suspended, debarred, or otherwise excluded annually at time of
award and to document these procedures.
Auditee Response and Corrective Action Plan:
Management agrees with the finding. Refer to the Corrective Action Plan.
Auditor’s Conclusion:
Finding remains as stated.