Finding Text
Federal Agency: U.S. Department of Agriculture
Federal Program Name: State Administrative Matching Grants for the Supplemental Nutrition Assistance Program
Assistance Listing Number: 10.561
Pass-through Agency: The Pennsylvania State University; New Jersey Department of Health
Pass-through Number: S004968-COP-TFT; DFHS24SNA005
Award Period: October 1, 2023 - September 30, 2024
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
• Other Matters
Criteria:
2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart F - Audit Requirements, section 200.303 requires that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes verifying that vendors are not suspended or debarred before engaging in transactions.
Condition:
During our testing, we found that the Organization provided documentation showing that the vendors used in the federal program were not listed as suspended or debarred according to the Sam.gov website, in line with their internal control procedures. However, there was no documentation indicating that the verification was performed prior to entering the transactions.
Questioned Costs:
None
Context:
The absence of documentation confirming that vendors were screened for suspension or debarment before engaging in transactions represents a gap in internal control over compliance. This control measure is essential to adhere to Federal regulations and reduce the risk of conducting business with parties who are suspended or debarred.
Cause:
The Organization did not have a formal process in place to document the verification of suspension and debarment status prior to engaging with vendors.
Effect:
In the absence of documented evidence of vendor verification, there is an elevated risk that the Organization may engage in transactions with suspended or debarred parties. This situation could lead to noncompliance with Federal regulations and result in potential penalties.
Repeat Finding:
N/A – Not a repeat finding.
Recommendation:
The Organization should establish and enforce controls to verify that vendors are not suspended or debarred prior to entering any transactions and maintain this documentation. This measure ensures the integrity of the procurement process and mitigates risks associated with engaging disqualified vendors. In 2024, the threshold amount for suspension and debarment checks was $25,000. Transactions equal to or exceeding this amount required verification to confirm that the entity involved was not debarred or suspended.
Viewed of Responsible Officials and Planned Corrective Actions:
Please refer to The Food Trust’s Corrective Action Plan.