Finding Text
Criteria: According to 2 CFR § 200.318, entities 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. These standards must ensure that no employee, officer, or agent has a conflict of interest, real or apparent, in the procurement process.
Condition: During our audit, we noted that Corporación Educativa Ramón Barquín d/b/a American Military Academy has an established conflict of interest policy which is enforced as stated, yet it does not have all the requirements established by 2 CFR § 200.318. The existing policy lacks the procedures for evaluation and management of conflicts, mitigation strategies, enforcement mechanisms, training and communication provision, and procedures for regular review and update.
Cause: The absence of these elements in the conflict-of-interest policy appears to be due to the Academy’s commencing to work with federal funds as the Conflict of Interest Policy was updated for 2024 and now contains all the elements required.
Effect: Without a compliant conflict of interest policy, there is an increased risk that procurement decisions may be influenced by undisclosed conflicts of interest, which could lead to non-compliance with federal regulations and potentially impair fair and open competition.
Questioned costs: -0- Since during our procurement test no actual conflict of interest was identified and during our interviews employees were aware of a policy being in place, even if for audit purposes it did not contain all the elements required.
Recommendation: We recommend that Corporación Educativa Ramón Barquín d/b/a American Military Academy revise its conflict-of-interest policy to include all elements required by 2 CFR § 200.318. Specifically, the policy should the procedures for evaluation and management of conflicts, mitigation strategies, enforcement mechanisms, training and communication provision, and procedures for regular review and update. Additionally, we recommend training for all employees involved in procurement activities on the revised policy to ensure understanding and compliance.
Views of Responsible Officials and Planned Corrective Actions: Corporación Educativa Ramón Barquín d/b/a American Military Academy agrees with the finding. See Corrective Action plan for the Academy’s Comments and plan.