Finding Text
Procurement and Suspension and Debarment
Federal Program Name
Higher Education Emergency Relief Fund (HEERF)
HEERF Institutional Portion, ALN. 84.425F
HEERF Minority Serving Institutions (MSIs), ALN. 84.425L
Name of Federal Agency
U.S. Department of Education
Pass-through Entity
N/A
Criteria
According to 2 CFR Section 200.319, all procurement transactions must be conducted in a manner
providing full and open competition. According to 2 CFR Section 200.320 there are three types of
procurement methods described in this section: informal procurement methods (for micro-purchases and
simplified acquisitions); formal procurement methods (through sealed bids or proposals); and
noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must
maintain and use documented procurement procedures. 2 CFR section 180.220(b)(1) non-federal entities
are prohibited from contracting with or making subawards under covered transactions to parties that are
suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a
non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed
$25,000.
Condition
As part of our testing of fifteen (15) disbursements from institutional funds, we noted the following instances
of non-compliance:
1. Six (6) transactions weren’t conducted in a manner providing full and open competition, no quotes
nor quote analysis were available for examination.
2. Six (6) transactions Suspension and Debarment verification weren’t performed.
Cause
The exceptions mentioned above are the result of the failure to implement adequate internal control
procedures, such as thorough managerial review, which should detect and correct, on a timely basis,
instances where controls are not being followed.
Effect
The institution COVID-19 policies and procedures were not followed, did not provide for full and open
competition and suspension and debarment verification were not performed, as a result of that the USDE
could be required to reimburse federal funds to the grantor for the expenditures incurred.
Questioned Cost
$201,543
Context
Of the 142 disbursements, we selected 15 transactions for testing and noted the following instances of
noncompliance:
1. Transactions were not conducted in a manner providing full and open competition 6
2. Suspension and Debarment verification were not performed 6
Identification of a Repeat Finding
This is not a repeat finding from the immediate previous audit.
Views of Responsible Officials and Planned Corrective Actions
The Institution management agrees with this finding. Please refer to the corrective action plan on pages
22-26. Recommendation
We recommend the Institution to establish adequate procedures and controls, which shall consider, among
others, the following:
• Shall improve its internal controls over the filing and safeguarding of documents in order to easily
identify and retrieve payment vouchers and all related supporting documentation.
• Establish and implement written policies and procedures for all aspects of the Purchase
administration, including controls for proper review and authorization during the processing and
payment of program expenditures. Payment documents and related supporting documentation
shall be thoroughly reviewed before they are recorded and processed for payment. All payment
vouchers shall be properly authorized by the respective Institution’s representatives and shall be
supported with all the required documentation.
• Provide adequate training to employees regarding each program requirements and proper
procurement and disbursement processing procedures, and as to the importance of safeguarding
procedures and the proper coordination and communication for the retrieval of documents when
needed.