Finding 508032 (2023-006)

Environmental Protection Agency, passed through State of North Dakota Department of Environmental Quality Federal Financial Assistance Listing #66.468 Capitalization Grants for Drinking Water Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Criteria - Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition - During the course of our engagement, it was identified that the District did not have a written policy on procurement that satisfied the requirements of 2 CFR sections 200.318 through 200.326. Cause - Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with all of these requirements. Effect - A lack of documented policies increase the overall risk that employees are not aware of the specific requirements with of procurement, suspension, and debarment. Questioned Costs – None reported Context/Sampling - Overall procurement policy. Repeat Finding from Prior Year(s) – No Recommendation - We recommend that management establish a written policy that addresses all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.326 and maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. Views of Responsible Officials - There is no disagreement with the audit finding.