Finding Text
Finding 2023-003: Procurement (Material Weakness)
Federal Programs: All Federal programs
Criteria: Under 2 CFR 200.318, the Uniform Guidance requires that a recipient of U.S Government
funds must use their own documented procurement procedures which reflect the applicable
Uniform Guidance requirements to procure goods and services in order to ensure that all
purchases are conducted in a manner that provides full and open competition.
Condition: During our testing over procurement, we determined that ICMEC did not clearly
document the rationale for the method of procurement, selection of contract type, contractor
selection or rejection, and the basis for the contract price.
Cause: ICMEC did not follow their established, internal procurement policy and that policy did not
follow the requirements of the Uniform Guidance for procurement.
Effect: Purchases of goods and services could be made above prevailing market rates if the
prescribed procurement procedures are not adhered to, and thus, there lies the potential that
ICMEC will not receive the best value for its purchases. The procurement process also allows for
the evaluation of potential conflicts of interest with prospective vendors and contractors. Failure to
perform the proper procurement procedures could result in disallowance of Federal expenditures
based on lack of fair competition.
Questioned Costs: None noted.
Context: Our audit procedures consisted of testwork completed on individual expenditures charged
to the Federal awards. The report in which samples were selected was generated directly from
ICMEC's general ledger (accounting system). We consider our sample to be representative of the
population. The condition appeared to be systemic in nature.
Identification as a Repeat Finding, if Applicable: Not a repeat finding.
Recommendation: We recommend that ICMEC revise their procurement policy to be align with
required Uniform Guidance standards. This policy should be communicated to all employees and
enforced during the upcoming year. All procurement records for purchases in excess of the
threshold should include the following at a minimum: (a) basis for the contractor/goods selected or
(b) justification for lack of competition when quotes or competitive bids are not obtained.
Additionally, the conclusion should be clearly documented and accompany the procurement
documentation. We also believe that all long-standing contractual engagements should evidence
occasional re-evaluation to ensure such relationships are free of conflicts.