Finding 513966 (2024-004)

Other Matter/Significant Deficiency Assistance Listing Number title and number: Promotion of the Humanities Challenge Grants, Assistance Listing Number 45.130 Federal award grant number and year: CHA-284001-22; 2024 Federal agency: National Endowment for the Arts Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and audit Requirements for Federal Awards, requires the auditee to comply with federal statutes, regulations, terms and conditions of federal awards that may have a direct and material effect on each of its major programs. The procurement compliance requirement requires the Organization to perform a search for vendor suspension or debarment prior to any use in conjunction with Federal awards. Condition: Instances of noncompliance have been identified as the Organization did not perform a search for vendor suspension or debarment prior to using such vendor on the major program’s Federal award. Cause: The cause is due to a lack of sufficient internal control procedures in place to ensure compliance with material compliance requirements for its federal award. Effect: The finding resulted in a significant deficiency issued on compliance for major programs. The vendor was subsequently searched and found not to be suspended or debarred. Questioned costs: None. Context: The Organization utilized one vendor in connection with all costs for the major program. Due to the prior use and history with the vendor, the Organization did not perform a search for suspension or debarment on the vendor despite using the vendor for a federal award. Repeat Finding: No. Recommendation: We recommend that the Organization review the most recent Compliance Supplement, which outlines compliance requirements for several of its federal awards. We encourage the Organization to monitor for any updates to the Compliance Supplement annually. Views of responsible officials: Management agrees with the finding. See corrective action plan.