Finding Text
Finding 2021-004: Procurement
Information on Federal Program: Assistance Listing Numbers 93.914 and 93.917
Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) Part 200,
paragraph 318 “General procurement standards” states that the non-Federal entity must use its own
documented procurement procedures which reflect applicable State, local, and tribal laws and
regulations, provided that the procurements conform to applicable Federal law and the standards.
Furthermore, paragraph 319 “Competition” states that all procurement transactions must be conducted
in a manner providing full and open competition consistent with these standards.
Condition: During our audit, we experienced difficulty in obtaining complete procurement
documentation for certain transactions selected for testing. Our audit revealed instances in which
procurement documentation was either not completed or lacked a documented justification regarding a
sole source vendor. Context: UHU does not have a documented procurement policy, and is not in noncompliance 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. The issue is considered
systemic in nature.
Cause: UHU was not in compliance with their policy.
Effect or Potential Effect: Purchases of goods and services could be made above the prevailing
market rates if the prescribed procurement procedures are not adhered to, and thus, there lies the
potential that UHU will not receive the best value for its purchases. The procurement process should
also allow for an evaluation of potential conflicts of interest with prospective vendors and contractors.
Furthermore, failure to perform the proper procurement procedures could result in disallowance of
Federal expenditures based on lack of fair competition.
Questioned Costs: Undetermined
Identification as a Repeat Finding, if Applicable: Repeat of Finding 2020-006
Recommendation: We recommend that UHU develop internal policies and procedures as it relates to
procurement. Additionally, we recommend UHU’s current procurement thresholds (and methods used
for the competitive bidding) ensure compliance with those thresholds and requirements set forth under
Uniform Guidance, CFR §200 subpart D.