Finding Text
Assistance Listing Number, Federal Agency, and Program Name - 21.027 U.S. Department of the Treasury Coronavirus State and Local Fiscal Recovery Funds
Federal Award Identification Number and Year - YDYNCVFA9NH4
Pass through Entity - City of Raleigh, North Carolina
Finding Type - Material weakness and material noncompliance with laws and regulations
Repeat Finding - No
Criteria - 2 CFR 200.318 requires that a nonfederal entity that acquires property or services under a federal award or subaward is required to adopt, maintain, and follow written procurement procedures, which comply with sections 2 CFR 200.318 through 327.
Condition - WakeMed does not have a written policy in place over procurement methods, which covers 2 CFR 200.318 200.327, nor did WakeMed follow required procurement guidelines.
Questioned Costs - $1,010,233
Identification of How Questioned Costs Were Computed - Questioned costs reflect the entire amount of costs expended under the grant during 2022.
Context - WakeMed did not have a written policy in place over procurement methods, which covers 2 CFR 200.318 200.327, when the grant was awarded. In addition, WakeMed did not follow required procurement procedures related to expenditures under the grant, including a competitive bid process for costs charged to the grant as WakeMed entered into the construction contract prior to being awarded the funds.
Cause and Effect - Failure to comply with the terms and conditions of the grant agreement, including procurement provisions, where controls were not in place to identify the requirement to have a written procurement policy and follow 2 CFR 200.318 200.327.
Recommendation - WakeMed should develop a written procurement policy, which complies with the 2 CFR 200.318 200.327 sections, and ensure controls are in place to comply with the procurement policy on an ongoing basis.
Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding as reported. WakeMed is in the process of updating their existing procurement policy to include the relevant sections from the Code of Federal Regulations and will provide education to the areas involved in procurement and use of federal funds on these requirements.