Finding Text
Finding 2023-009 - Procurement
Information on Federal Programs: All programs
Criteria or Specific Requirements: According to 2 CFR §200.303, the non-Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, according to 2 CFR §200.320, Procurement standards, the non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §200.318, and §200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award: a) Informal procurement methods, b) Formal procurement methods, c) Noncompetitive procurement.
Condition: During the review of the procurement compliance requirement related to major program, it was determined that U.S. Water Alliance did not have a document procurement policy in place until August 2023.
Cause: Management did not have internal control procedures in place to ensure that procurement requirements were adequately followed, documented and retained when Federal awards were obtained.
Effect: Failure to have and use documented procurement procedures could have resulted in noncompliance with the Criteria section above.
Perspective: U.S. Water Alliance established a documented procurement policy that was put in place in August 2023. Within a random sample of 26 disbursements, 3 disbursements would have required compliance with the simplified acquisition method, but would have also met the exception due to the existence of an emergency causing public harm and the specialized nature of the work performed.
Questioned Costs: Questioned costs were not identified.
Repeat Finding: Not applicable.
Recommendation: U.S. Water Alliance should adhere to its procurement policy put in place in August 2023 to ensure compliance with the Uniform Guidance going forward.
Views of Responsible Officials and Planned Corrective Actions: While the Alliance did not have a standalone procurement policy in place until August 2023, it did have purchasing policies embedded in its Accounting and Finance Manual that covered purchases relative to our work at that time. No further corrective action is needed however policies are reviewed annually to ensure compliance under 2 CFR 200.516(a).