Finding 554405 (2023-003)

Material Weakness
Requirement
I
Questioned Costs
-
Year
2023
Accepted
2025-04-08

AI Summary

  • Core Issue: ICEDC's procurement policy fails to meet federal requirements, lacking necessary documentation for vendor selection and compliance checks.
  • Impacted Requirements: Noncompliance with 2 CFR Part 200 sections 200.318-327, including failure to document single-source vendor justification and suspension/debarment checks.
  • Recommended Follow-Up: Update procurement policy to align with federal standards, enhance documentation practices, and train staff on compliance requirements.

Finding Text

Criteria or specific requirement: 2 CFR Part 200 sections 200.318-327 outline the required general procurement standards, competition, and methods of procurement to be followed. These elements must be incorporated into an organization’s procurement policies and must be followed to ensure procurements are supported and covered transactions are only entered into with entities that are not federally suspended or debarred. Condition: ICEDC’s procurement policy is not in compliance with Uniform Guidance. For the sampled procurement transactions, documentation was not retained for determining that vendors were single source, as required by Uniform Guidance. In addition, documentation was not retained showing selected entities were checked for suspension and debarment prior to entering into the covered transactions. Questioned costs: None. Context: As the ICEDC procurement policy did not specify a micro purchase threshold, CLA tested all procurement transactions charged to the major program that exceeded Uniform Guidance's micro purchase threshold of $10,000 (a total of 3 procurement). The transactions were found to be out of compliance with federal procurement requirements, as documentation was not retained detailing the history of the procurement; determination process of contractors as single source, including the rationale for the method of procurement; determination of contract type; basis for contractor selection; and the basis for the contract price. Documentation should be retained to evidence that an adequate number of quotes were reviewed, that price analysis was performed, and the rationale that a procurement should be considered a noncompetitive procurement. In addition, documentation was not retained showing that the procured vendors were checked for federal suspension and debarment prior to entering into the covered transactions. Cause: Due to improper policy in place and lack of knowledge about federal procurement, suspension and debarment, and documentation requirements. Effect: Noncompliant policies and documentation can lead to selecting vendors that are federally suspended or debarred and could result in procurement of goods and services that are unideal for the federal program. Repeat Finding: No. Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done prior to entering into a covered transaction. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within ICEDC. Views of responsible officials: There is no disagreement with the audit finding.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 554398 2023-002
    Material Weakness
  • 554399 2023-002
    Material Weakness
  • 554400 2023-002
    Material Weakness
  • 554401 2023-002
    Material Weakness
  • 554402 2023-002
    Material Weakness
  • 554403 2023-002
    Material Weakness
  • 554404 2023-003
    Material Weakness
  • 554406 2023-003
    Material Weakness
  • 554407 2023-003
    Material Weakness
  • 554408 2023-003
    Material Weakness
  • 554409 2023-003
    Material Weakness
  • 554410 2023-004
    Material Weakness
  • 554411 2023-004
    Material Weakness
  • 554412 2023-004
    Material Weakness
  • 554413 2023-004
    Material Weakness
  • 554414 2023-004
    Material Weakness
  • 554415 2023-004
    Material Weakness
  • 1130840 2023-002
    Material Weakness
  • 1130841 2023-002
    Material Weakness
  • 1130842 2023-002
    Material Weakness
  • 1130843 2023-002
    Material Weakness
  • 1130844 2023-002
    Material Weakness
  • 1130845 2023-002
    Material Weakness
  • 1130846 2023-003
    Material Weakness
  • 1130847 2023-003
    Material Weakness
  • 1130848 2023-003
    Material Weakness
  • 1130849 2023-003
    Material Weakness
  • 1130850 2023-003
    Material Weakness
  • 1130851 2023-003
    Material Weakness
  • 1130852 2023-004
    Material Weakness
  • 1130853 2023-004
    Material Weakness
  • 1130854 2023-004
    Material Weakness
  • 1130855 2023-004
    Material Weakness
  • 1130856 2023-004
    Material Weakness
  • 1130857 2023-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
21.027 Covid 19: Coronavirus State and Local Fiscal Recovery Funds - Provided to Businesses and Organizations $736,500
21.027 Covid 19: Coronavirus State and Local Fiscal Recovery Funds - Paid for Services to Rain Catalysts $320,839
21.027 Covid 19: Coronavirus State and Local Fiscal Recovery Funds - Provided to Businesses $135,557
21.027 Covid 19: Coronavirus State and Local Fiscal Recovery Funds - Retained for Administrative Fee, Rent, and Purchase of Equipment $78,775
21.027 Covid 19: Coronavirus State and Local Fiscal Recovery Funds - Paid to the Economic Development Alliance of Skagit County (edasc) $23,102
21.027 Covid 19: Coronavirus State and Local Fiscal Recovery Funds - Retained for Administrative Fee $4,067