Finding Text
Finding 2022-003: Procurement
Criteria: CFR 200.318 states that non-Federal entities must have and use documented procurement
procedures consistent with the requirements for procurement regulations included in paragraphs 318
through 327.
Condition: We noted procurement procedures are outsourced to a third party and management is
heavily involved in the ultimate decision. However, this policy is not formalized.
Cause: USTTI did not have a documented formal procurement policy in place.
Effect: A lack of a formal procurement policy is insufficient to meet the requirements noted in the
Criteria section above.
Questioned Costs: None.
Context: USTTI does not have a formal procurement policy, and hence, not in compliance with
Federal standards.
Our audit work in this area consisted of internal control testwork over a random sample of
expenditures, as well as substantive testwork over transactions above a defined threshold from select
expense accounts that were charged to the Federal program. We consider our samples to be
representative of the respective populations, and thus, are statistically valid samples. The issue is
considered systemic in nature. Identification as a Repeat Finding: Not applicable.
Recommendation: We recommend USTTI formalize a procurement policy to be in compliance with 2
CFR 200. We then recommend that USTTI management ensure its policy is distributed and
communicated in a formal manner to its employees, and that management properly enforce
compliance with its policy. All procurement actions should be clearly documented in writing and
maintained in the vendor or contractor files.