Finding Text
Compliance Requirement: Procurement, Suspension, and Debarment
Criteria:
Procurement
In accordance with 2 CFR Part 200 for Procurement, small purchase procedures are used for purchases
that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000).
If small purchase procedures are used, price or rate quotations must be obtained from an adequate
number of qualified sources. Micro-purchases may be awarded without soliciting competitive quotations if
the non-federal entity considers the price reasonable and maintains documents to support its conclusion.
Further, in accordance with the Laboratory’s procurement policy, documentation is required, using the
Laboratory’s vendor justification/price verification form, for purchases to support the price checking and
vendor selection for the items being charged directly to a federal award.
Condition:
30 procurement transactions were selected from all procurement transactions over $10,000 under federal
awards. Of the 30 items selected, we noted 1 item did not follow the requirement to obtain and maintain
documentation in accordance with the Laboratory’s policy over soliciting competitive quotations for
procurements over $10,000.
Possible Asserted Cause and Effect:
The Laboratory did not comply with their procurement policy or the 2 CFR Part 200, Appendix XI. The
review controls in place to identify such required documentation was not executed as designed and as a
result an invoice was charged to a federal award without the requisite documentation. However, we note
the Laboratory did identify the error in documentation after the fact, during a monitoring review conducted
by internal audit in 2025.
Identification of Questioned Costs:
$33,940
Whether Sampling was Statistically Valid:
The sample was not intended to be, and was not, a statistically valid sample.
Identification of Whether the Audit Finding was a Repeat Findings:
This is not a repeat finding.
Recommendation:
We recommend that the Laboratory review its current policies and procedures to ensure procurement
transactions are reviewed and substantiated with formal documentation prior to approval of the transaction.
Views of Responsible Officials:
Management agrees with finding 2024-001.
In fiscal year 2024 the Laboratory charged a federal sponsored award for a procurement item, which
exceeded the Laboratory’s micro-purchase threshold, without maintaining the proper documentation as
required by Laboratory procurement policy. In fiscal 2025 this item was identified by the Laboratory’s
Internal Audit and Sponsored Programs Accounting Offices as part of their routine review program. The
transaction cost was removed by Laboratory Management from the federal award within 90 days of the
item’s discovery; however, because the item was identified and adjusted in 2025, the fiscal year 2024
Schedule of Expenditures of Federal Awards (SEFA) was overstated.
To ensure compliance with the Laboratory’s procurement policies, the Laboratory has implemented
corrective actions as detailed below, in line with the recommendation:
Corrective Actions Previously Implemented:
1. The Laboratory’s Internal Audit and Sponsored Program Accounting Offices will continue to conduct regular
reviews of procurement items to ensure that documentation complies with Laboratory Procurement
Methods Policy and Procedure, to ensure compliance with Laboratory policy, designed to ensure
compliance with 2 CFR Sections 200.317 through 200.327. The audit focus will continue to be on 100% of
sponsored award procurement transactions in the small purchase threshold.
2. The Laboratory Information Technology department, in collaboration with the Laboratory’s Procurement
Office Director, enhanced certain system-generated reporting to allow for easier identification by
Procurement Office personnel of charges to sponsored awards.
Corrective Actions to be Implemented:
1. The Laboratory’s Sponsored Programs Accounting Office, in collaboration with its Procurement Office, will
provide an annual re-education to Laboratory administrative research personnel concerning Laboratory
Procurement Policies, designed to ensure compliance with 2 CFR Sections 200.317 through 200.327.
2. The Sponsored Programs Accounting Office will provide re-training for administrative staff to reinforce the
Laboratory Procurement Method Policies and Procedure.
3. The Director of Procurement will streamline access and visibility of the Procurement Methods Policy and
Procedure on the Laboratory’s internal website.
Management intends for the re-education of administrative research personnel and re-training for
administrative staff to be concluded by the end of the third quarter and/or early fourth quarter of 2025.
Management intends to provide for streamlined access and visibility of Laboratory Procurement Methods
Policy and Procedure on its internal website prior to the end of 2025.