FAC Explorer

Finding 524788 (2023-003)

Significant Deficiency
Requirement
I
Questioned Costs
-
Year
2023
Accepted
2025-02-27
Audit: 344172
Organization: Arizona Small Business Association (AZ)
Auditor: Cbiz CPAS PC

AI Summary

  • Core Issue: The Association failed to keep necessary documentation for procurement processes, violating federal standards.
  • Impacted Requirements: This affects compliance with 2 CFR § 200.318, which mandates detailed records for procurement transactions.
  • Recommended Follow-Up: Strengthen internal controls to ensure adherence to procurement policies and maintain required documentation.

Finding Text

Assistance Listing Number:21.027Program:COVID-19 – Coronavirus State and Local Fiscal Recovery FundsFederal Agency:U.S. Department of the TreasuryPass-Through Agencies:Arizona State Office of the Governor; Maricopa CountyPass-Through Grantor Identifying Number:UnknownAward Year:March 1, 2022 to September 30, 2024Compliance Requirement:Procurement, suspension and debarmentCriteria or Specific Requirement:In accordance with 2 CFR § 200.318 – Procurement Standards, the Association is required to maintain records to sufficiently detail the history of each procurement transaction, including the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price.Condition:The Association did not retain documentation regarding the procurement procedures performed over one of the vendors tested. Questioned Costs:N/AContext:In a population of 129 program costs, we conducted a non-statistical sample of 13 transactions. In our sample of 13 transactions, one procurement was above the micro-purchase but below the small purchase threshold for which there was no documentation retained regarding quotes or rates obtained from other vendors. Per review of all program costs, the untested costs either fell below the micro-purchase threshold or were explicitly named in the approved budget. Additionally, the Association has a written procurement policy that aligns with the requirements of 2 CFR § 200.318. As such this is deemed to be a significant deficiency in internal controls over compliance.Cause:The Association did not follow its procurement policy when purchasing goods and services under the federal award.Effect:Undocumented procurement decisions could violate the requirements of 2 CFR § 200.318.Repeat Finding:Not a repeat finding.Recommendation:We recommend implementing stronger controls to ensure adherence to the policies that conform to 2 CFR § 200.318.Views of Responsible Officials and Planned Corrective Actions:Management of the Association concurs with the finding. See Corrective Action Plan.

Corrective Action Plan

2023-003 Assistance Listing Number:21.027Program:COVID-19 – Coronavirus State and Local Fiscal Recovery FundsFederal Agency:U.S. Department of TreasuryPass-Through Agency:Arizona State Office of the Governor; Maricopa CountyCompliance Requirement:Procurement, suspension and debarmentCriteria or Specific Requirement:In accordance with 2 CFR § 200.318 – Procurement Standards, the Association is required to maintain records to sufficiently detail the history of each procurement transaction, including the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price.Condition:The Association did not retain documentation regarding the procurement procedures performed over one of the vendors tested. Name of Contact Person:Debbie Hann, Interim CEOPhone Number:(602) 306-4000Anticipated Completion Date:February 2025 Views of Responsible Officials and Corrective Actions:Management agrees with the finding. To address the auditor’s recommendation, ASBA will update its policies and procedures to ensure compliance with 2 CFR § 200.318. This will include implementing a formal procurement process with clear guidelines for competitive bidding, documentation, and approvals. Management will also establish a system to monitor procurement activities regularly, ensuring ongoing adherence to the updated policies and regulations.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 1101230 2023-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.83M