Finding Text
Criteria or Specific Requirement – Management is required to ensure that there are sufficient internal controls in place over program purchasing. This includes use of the Organization's own documented procurement procedures which reflect applicable state and local law regulations, provided that the procurements conform to applicable federal law and standards. As well as, internal controls that documentation is maintained to support compliance with the procurement policy.
Condition –The Organization does not have a formalized procurement policy that conforms to applicable standards under Uniform Guidance. Additionally, there was no documentation of the history of procurement including the rationale for the method of procurement and the Organization's procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended or otherwise excluded.
Context – During our testing of procurement, we sampled eight expenditures totaling $526,401. We noted that two of the eight selections did not have documentation of the rationale for the method of procurement. Additionally, we noted that all eight selections of expenditures did not have SAMS.gov verification documentation. However, as part of our audit procedures, we determined that the expenditures were made with contractors which were not supsended or disbarred and were appproved on the SAMS.gov website.
Cause – Procurement policy was not sufficient to ensure full compliance.
Effect or Potential Effect – The Organization does not have adequate documentation to support the rationale for procurement method. Additionally, use of non-approved vendors could have occurred. However, as part of our audit procedures, we determined that the expenditures were made with contractors which were not suspended or disbarred and were approved on the SAMS.gov website.
Recommendation – We recommend that management implement a formal procurement policy using the guidance of 2 CFR 200.317 - 200..327. Additionally, management should follow this policy when procuring services or property and maintain the related documentation.
Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding. Management is in the process of reviewing and revising its policies.