Finding 512421 (2024-001)

FINDING 2024-001 – Procurement and Suspension and Debarment: Significant Deficiency in Internal Control Over Compliance (See Section III - Federal Award Findings and Questioned Costs for table included) Criteria – 2 CFR 200 section 318(i): Procurement records. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition/Context – A sample of 10 vendors was selected and documentation of procurement history was requested. For 4 of the 10 vendors selected, EES had not retained or was unable to provide documentation of the rationale for the procurement method, contract type selection, contractor selection and approval, and the bids or other basis for the contract price. Questioned Costs – None Effect – If controls are not operating effectively and documentation is not maintained, EES may purchase goods or services that do not meet the requirements of their procurement policy, which is based on federal and state regulations. Cause – EES does not have a formal process in place for documenting and retaining documentation of vendor procurement considerations in accordance with their procurement policy. Repeat finding – This is not a repeat finding. Recommendation – We recommend EES reviews their procurement policy and ensures purchases are analyzed consistent with policy, and that the rationale for the procurement method, contract type selection, contractor selection or rejection, and the bids or quotes obtained as the basis for the contract price are documented and retained. Views of Responsible Officials and Planned Corrective Actions – EES will review their policies and procedures for reasonableness and alignment with the Funding Terms and Conditions for the CDE and CDSS. Once completed, EES will implement proper procedures and controls ensuring that appropriate documentation of the rationale for the procurement method, contract type selection, contractor selection and approval, and bids or other basis for the contract price happen in practice.