FAC Explorer

Finding 526662 (2024-001)

Material Weakness
Requirement
I
Questioned Costs
-
Year
2024
Accepted
2025-03-11
Audit: 345671
Organization: Easter Seals Oregon (OR)
Auditor: Cliftonlarsonallen LLP

AI Summary

  • Core Issue: There is a material weakness in internal controls regarding compliance with suspension and debarment checks for vendors.
  • Impacted Requirements: Non-federal entities must verify that vendors are not suspended or debarred before entering into covered transactions, as outlined in 2 CFR section 180.220.
  • Recommended Follow-Up: Update policies and procedures to ensure documentation of suspension and debarment checks is maintained for all covered transactions.

Finding Text

Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Federal Agency: U.S. Department of Veterans Affairs Federal Program Name: VA Supportive Services for Veteran Families Assistance Listing Number: 64.033 Federal Award Identification Number and Year: 2020-OR-272-SS – 2021, 2020-OR-272-LT 2022, 2020-OR-272-23 – 2023, 2020-OR-272-24 2024 Award Period: 2020-OR-272-SS: 09/01/2021 - 09/30/2024 2020-OR-272-LT: 08/19/2022 - 09/30/2026 2020-OR-272-23: 10/01/2022 - 09/30/2024 2020-OR-272-24: 10/01/2023 - 09/30/2024Criteria or specific requirement: 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 or meet certain other criteria as specified in 2 CFR section 180.220). All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Condition: Internal controls did not include maintaining the documentation of the verifiable check on www.SAM.gov for an entity’s suspension or debarment status prior to entering the covered transactions. Questioned costs: None. Context: In a statistically valid sample, CLA tested 3 of 3 covered transactions that should have been subject to suspension and debarment checks. Testing determined that no documentation was kept substantiating that S&D checks were performed, but upon review of the vendors on SAM.gov, CLA determined that none of the tested vendors were federally suspended nor debarred.Cause: Due to improper policy in place for suspension and debarment, which did not include maintaining the documentation of vendor check for suspension and debarment. Effect: Noncompliant policies and documentation can lead to selecting vendors that are federally suspended or debarred. Repeat Finding: No. Recommendation: CLA recommends ESO update policies to match Uniform Guidance requirements and to update procedures to require documentation is kept showing that suspension and debarment checks are done prior to entering into a covered transaction.

Corrective Action Plan

Material Weakness in Internal Control over Compliance and Material Noncompliance – Suspension and Debarment Funding Agency: U.S. Department of Veterans Affairs Program: Supportive Services for Veteran Families Assistance Listing Number: 64.033 Criteria or Specific Requirement: 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 or meet certain other criteria as specified in 2 CFR section 180.220). All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Condition: Internal controls did not include maintaining the documentation of the verifiable check on www.SAM.gov for an entity’s suspension or debarment status prior to entering the covered transactions. Context: CLA determined population by summarizing program general expenditures by vendor name. Matched to summary of full GL expenditure details by vendor. Identified vendors who were paid at least $25k in the CY which were paid at least in part with program funds. Additionally assessed vendors who were paid less than $25k to see if they were subject to contracts >$25k. CLA determined a population of three. Tested all three at 8150.I-2 noted that none had documentation to substantiate procedures. Questioned Costs: None Cause/Effect: The Organization could enter a covered transaction with an entity that is suspended or debarred from receiving federal funding. Recommendation: CLA recommends the Organization updated its policies and procedures to include a documented check on www.sam.gov for entities it intends to enter a covered transaction with. View of Responsible Official and Corrective Action Management updated its policies and procedures to include the required suspension and debarment check in the vendor supporting documentation files, which will be reviewed and overseen by the CFO, Danielle Gibson, and will implement these procedures immediately.

Categories

Procurement, Suspension & Debarment Subrecipient Monitoring

Other Findings in this Audit

  • 1103104 2024-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
64.003 Supportive Services for Veteran Families $5.97M
17.235 Senior Community Service Employment Program $4.61M
17.805 Homeless Veterans’ Reintegration Program $320,159
94.493 Consolidated Appropriations Act, 2022 Congressional Directives $82,460
21.027 Coronavirus State Fiscal Recovery Fund $22,935