Finding Text
Criteria
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 passthrough 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. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300).
Further, the non-Federal entity must establish and maintain effective internal controls over the compliance requirement that provides reasonable assurance that the non-Federal entity will comply with the Suspension and Debarment compliance requirement
Condition and Context
We selected 3 vendors with expenditures totaling approximately $420,000, from total non-payroll expenditures of $580,000, for suspension and debarment procedures and noted the College confirmed compliance with suspension and debarment requirements after the date and payment of the vendor invoice.
Cause
The College’s purchasing procedures do not require documentation that the SAM was checked prior to entering into the transaction. In addition, the College did not collect a certification from the entity and did not have a clause in the contract with the vendor.
Effect
There is a risk that the College could enter into transactions with vendors that are suspended/debarred. Failure to document and follow procurement policies and procedures could impact the College’s ability to demonstrate compliance with federal regulations.
Questioned Costs
There were no questioned costs related to this finding.
Recommendation
We recommend the College enhance its existing procurement processes and policies to ensure all decisions and conclusions supporting procurement are made in a timely manner and completely documented in the procurement files prior to entering into transactions with vendors. The College should also ensure that all required suspension and debarment checks are performed, and documentation is maintained in advance of transacting with vendors. The College should consider including the suspension and debarment certification requirement and/or clause in its standard bidding documents and contract terms and conditions.
Views of Responsible Official
Manhattan College acknowledges finding 2024-001 (Procurement and Suspension and Debarment) presented in the June 30, 2024 single audit report. Although the College provided evidence to the auditors that the vendors noted in the review were not suspended or debarred from federal programs at the time of the transaction and are currently in good standing, and the finding does not give rise to any questioned costs, we agree that controls and policies should be improved. We have implemented a series of corrective actions, identified below, to address the finding and prevent future recurrence. We are committed to ensuring that all necessary steps are taken and procedures implemented to improve our processes and maintain full compliance moving forward.