Significant Deficiency in Internal Controls ? Procurement, Suspension and Debarment Funding Agency: Department of Treasury Program: Emergency Rental Assistance Program Assistance Listing Number: 21.027 Criteria or Specific Requirement: Criteria or specific requirement: 2 CFR 200.318(i) states that "the non-Federal entity must maintain record 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". In addition, 2 CFR 200.320(a)(2)(i) states that "... If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity". Per the Organization's written procurement policy, the adequate number of sources is determined to be three. Condition: For the entire population (two disbursements from one procurement), documentation was not retained for the adequate number of price comparisons prior to exercising the procurement, as required and stated in the Organization's written procurement policy. Context: A sample of two disbursements from a population of one procurement transaction charged to the major program that exceeded the Organization's established micropurchase threshold of $10,000. The transaction was found to be out of compliance with the Procurement requirements, as documentation was not retained for the adequate number of price comparisons. Questioned Costs: Undeterminable Cause/Effect:. An employee charged with the procurement process for these transactions misinterpreted the aggregation rules between capitalization and procurement thresholds, and therefore did not obtain nor retain three contemporaneous quotes. Without adequate records retained, the Organization is at risk of noncompliance with the standards of Procurement. Recommendation: Opportunity Council has already taken steps to communicate the error with the applicable employee and is currently implementing an additional level of fiscal review earlier in the procurement process to ensure that documentation exists prior to procurement and that it is retained with the accounting record. We recommend moving forward with the additional layer of review and emphasizing the importance of the procurement standards and established policy to all authorized purchasers within the Organization. View of Responsible Official and Corrective Action Management accepts the finding and is taking the following corrective action to prevent recurrence: ? Updating Organizational Policies to clearly permit a higher small purchases threshold, combined with annual certification of eligibility, to sharply decrease the likelihood of recurrence of the underlying cause of the finding. ? Implementing accounting system-level controls that will require an additional approval from assigned fiscal staff to transactions exceeding the small purchase threshold prior to payment, ensuring accountability for monitoring of required documentation for procurements in excess of the threshold. ? Procurement training planned throughout the agency to ensure that personnel authorized to initiate procurement transactions are aware of organizational policies and have the guidance necessary to comply with procurement rules.