Finding Text
Condition: During our testing of internal controls, we found that there were no documented policies and procedures over procurement, suspension and debarment in place during the fiscal year. We reviewed the Organization’s procurement policy, however noted it was not effective until July 1, 2024. The Organization was operating without a formal procurement policy during fiscal year 2024. Additionally, a sample of one (1) contractor was selected for testing procurement, suspension, and debarment. Our test work indicated that there was no documentation for the verification of suspension and debarment for the contractor selected for testing.
Criteria: The Organization is responsible for establishing and maintaining effective procurement internal control policies and procedures which are paramount to protecting an organization’s assets. Suspension and debarment regulations under 2 CFR should be followed.
Cause: The Organization has had significant turnover in the Finance Department for the last three years, which resulted in failure to timely establish procurement internal control policies and procedures. Procedures have not been established to verify if vendors contracted with the Organization related to the federal program in excess of $25,000 are not suspended, debarred or otherwise excluded from doing business.
Effect: As a result of the internal control matters noted above, the Organization’s personnel did not have
clear instructions on how and when procurement procedures should occur. Noncompliance with the federal
award program’s suspension and debarment compliance requirements could occur and not be detected and corrected timely.
Recommendation: We noted the Organization has a procurement policy in place effective July 1, 2024 and recommend the Organization continue to use the policy for any future procurement transactions. We further recommend that the Organization establish and document suspension and debarment reviews for all contracts entered into using federal awards.
Views of Responsible Officials and Planned Corrective Actions: The Organization has recently hired an outside consultant and adopted a new Procurement policy as of July 2024. The Organization has adopted a Procurement policy, which includes procedures on how to document suspension and debarment reviews for all contracts entered into using federal awards.