Finding Text
Criteria: Per 2 CFR §200.318, general procurement standards, the entity must establish policies for
procurement of services funded by federal funds. The procurement records and files for purchases in
excess of the micro purchase threshold shall include at a minimum the following items: the basis for
contractor selection, justification for lack of competition when competitive bids are not obtained, and basis
for award cost or price. In addition, award recipients must not utilize any vendor which is suspended or
debarred or is otherwise excluded from the central contractor registry. To ensure this is done, recipients
should utilize the Excluded Parties List System website.
Condition/Context: For our sample of one (representing the entire population), there was no
documentation of policies and procedures for procurement of services funded by federal funds of $40,000.
We determined for this program that rate quotations and rationale for limited competition was not retained
for the vendor. It was also determined that there was no documentation retained regarding verification of
vendor suspension or debarment.
Questioned Costs: None noted.
Cause: The entity has written policies including detailed levels of approvals for various vendors and
purchases. However, the entity does not have policies and procedures designed for procurements under
the Uniform Guidance, and therefore, there is not a formal process established to document the
performance of such controls. We note that inadequate controls could result in a reasonable possibility that
the entity would not be able to detect and correct noncompliance in a timely manner.
Effect: Costs charged to federal awards without appropriate documentation of procurement policies and
processes may be subject to disallowance.
Repeat Finding: No.
Recommendation: We recommend developing written procurement policies in accordance with the
Uniform Guidance and implementing a system of review and approval controls to complement the design
of processes over the procurement, suspension, and debarment compliance requirements. In addition, we
recommend retaining documentation regarding procurement decisions including rate quotations and
verification of vendor suspension and debarment checks.
Views of Responsible Officials: The Entity agrees with the recommendation. The Entity will develop a
formal procurement plan for federal expenditures which will include the specific processes for selecting
vendors including documentation retention of the selection process. The policy will also include the process
to be followed for verification of vendor suspension or debarment. At the time of the policy’s adoption by
the Division, the document will be shared with all corps officers and program administrators throughout the
Division. The Divisional Contract Compliance Manager will be responsible for identifying grants to which
the policy would apply and to assist with retaining the documentation.