Finding Text
Finding 2022-002 Significant Deficiency: Procurement and Suspension and Debarment – Compliance and Control Finding
ALN 11.020 – Economic Development Administration
Federal Agency: U.S. Department of Commerce
Pass-Through Entity: N/A - Direct Award
Criteria Or Specific Requirement: The Uniform Guidance requires the Organization to adhere to federal procurement requirements when expending federal funds under the project. The Organization also must adhere to federal requirements to ensure that its contractors have not been suspended or debarred from receiving federal funds.
Condition: The Organization procured services with one vendor in an amount in excess of the $10,000 micropurchase threshold where the procurement process was not followed. Additionally, the Organization did not ensure that its contractors have not been suspended or debarred from receiving federal funds by either including appropriate language to this effect within the contract or determining that the contractors were not included within the suspension and debarment listing within the EPLS database.
Cause: The Organization’s internal control in place (review of reports by a supervisory employee) failed to ensure that procurement and suspension and debarment procedures were followed.
Effect: The Organization could contract with a contractor who is either not the most qualified and/or lowest cost provider, or who is suspended or debarred.
Context: Of three contracts selected for procurement testing, one contract had not gone through the procurement process. Additionally, none of the three contracts had been subjected to procedures to ensure the contractor was not suspended or debarred.
Questioned Costs: None.
Identification As A Repeat Finding: Not applicable.
Recommendation: We recommend that management evaluate their existing internal control for the review of reports, and consider enhancing it to ensure that all reports are submitted by applicable deadlines.
Views Of Responsible Officials: Along with strengthening of reporting, the hiring of the dedicated Grants Coordinator position additionally improved controls related to procurement. Updated internal forms to document purchasing and classify procurement requirements were established and integrated with project management tools; new procurement templates were established; and improved repositories for cataloguing procurement materials and invoices were established. Additionally, moving forward, the suspension and disbarment language will now be included specifically in all contracts and has been added into the contract template.