Finding Text
Federal Program Information
Funding Agency: U.S. Department of Treasury
Federal ALN: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds
Pass Through Agency: Tennessee Arts Commission
Criteria
As required by the Uniform Guidance, procurement standards require non-federal entities to
follow documented procurement procedures that are in compliance with the procurement
standards in the federal guidelines.
Condition
During the period under audit, FAM had a procurement policy in place, but it did not comply with
the procurement standards in the federal guidelines.
Cause
FAM did not develop a procurement policy that included compliance with the micropurchase
threshold requirements and therefore did not have a procurement policy in place that met the
requirements of the Uniform Guidance.
Effect
Purchases may occur that do not meet the procurement standards.
Context
For the year ending December 31, 2023, all of the expenditures charged to the grant were over the
$10,000 micropurchase threshold. While certain agreements in effect during the year could be
subject to the procurement requirements, most were in effect prior to the start of the grant period
or are for services such as utilities or professional services not subject to the procurement
requirements. No new agreements were entered into during the year ending December 31, 2023,
that were charged against the grant.
Identification of a Repeat Finding
This is a repeat finding from the immediate previous audit, 2022-002, which has been partially
corrected.
Auditor’s Recommendation
FAM should ensure that the procurement policy subsequently implemented meets the
procurement standards outlined in the Uniform Guidance, and should be followed for all
purchases meeting the established thresholds.
Views of Responsible Officials and Planned Corrective Actions
Management agrees with the auditor’s recommendation. In FY 2022, FAM encountered
difficulties complying with this criterion because the grant was not awarded and under contract
until over nine months after the grant period began. Long-standing vendor relationships were
already in place and so costs were incurred prior to award knowledge. In FY 2023, FAM had
already incurred costs before the FY 2022 Uniform Guidance audit brought to our attention that
our procurement policy did not comply with federal guidelines. FAM has developed a
procurement policy that meets the procurement standards outlined in the Uniform Guidance
including established thresholds.