Finding 957639 (2023-003)

HEERF INSTITUTIONAL AID SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUE) YEAR ENDED JUNE 30, 2023 PROCUREMENT SUSPENSION AND DEBARMENT FINDING NO. 2023-003 – PROCUREMENT SUSPENSION AND DEBARMENT CRITERIA Suspension and Debarment Schools are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 C.F.R.§ 180.220. All non-procurement transactions entered by a passthrough entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 C.F.R. § 180.215. When a school enters into a covered transaction with an entity at a lower tier, the school must verify that the entity, as defined in 2 C.F.R. § 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management Exclusions maintained by the General Services Administration and available at https://www.sam.gov/SAM/ (click on Search Record, then click on Advanced Search- Exclusions) (Note: The OMB guidance at 2 C.F.R. part 180 and agency implementing regulations still refer to the System for Award Management Exclusions as the Excluded Parties List System), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 C.F.R. § 180.300). Schools receiving contracts from the federal government are required to comply with the contract clause at FAR 52.209-6 before entering into a subcontract that will exceed $30,000, other than a subcontract for a commercially available off-the-shelf item. Criteria: 2 C.F.R. §§ 200.318 through 200.326 2 C.F.R. Part 180 48 C.F.R. Subpart 2.1 48 C.F.R. § 9.405-2(b) 48 C.F.R. § 52.209-6 HEERF INSTITUTIONAL AID SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUE) YEAR ENDED JUNE 30, 2023 PROCUREMENT SUSPENSION AND DEBARMENT FINDING NO. 2023-003 – PROCUREMENT SUSPENSION AND DEBARMENT (CONTINUE) CRITERIA (CONTINUE) Improper payment means: (1) Any payment that should not have been made or that was made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements. (i) Incorrect amounts are overpayments or underpayments that are made to eligible recipients (including inappropriate denials of payment or service, any payment that does not account for credit for applicable discounts, payments that are for an incorrect amount, and duplicate payments). An improper payment also includes any payment that was made to an ineligible recipient or for an ineligible good or service, or payments for goods or services not received. Note 1 to paragraph (1)(i) of this definition. Applicable discounts are only those discounts where it is both advantageous and within the agency's control to claim them. (ii) When an agency's review is unable to discern whether a payment was proper as a result of insufficient or lack of documentation, this payment should also be considered an improper payment. When establishing documentation requirements for payments, agencies should ensure that all documentation requirements are necessary and should refrain from imposing additional burdensome documentation requirements. Code of Federal regulations Title II Subtitle A Chapter II Part 200 Subpart A-Acronyms Section 200.1 HEERF INSTITUTIONAL AID SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUE) YEAR ENDED JUNE 30, 2023 PROCUREMENT SUSPENSION AND DEBARMENT FINDING NO. 2023-003 – PROCUREMENT SUSPENSION AND DEBARMENT (CONTINUE) CONDITION We examined one hundred percent (100%) of the disbursed made and charged to HEERF Instutional Aid for the fiscal year 2022-2023 and noted the following: 1) UPM did not have documentation related Schools are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. 2) UPM made five (5) payments for $100,406.71 in advance for goods or services not received at the disbursement date. EFFECT UPM did not comply with the regulations and internal controls procedures to made disbursements before received goods or services. QUESTIONED COSTS $100,406.71 CAUSE The institution did not follow the institutional procedures to make disbursements before received goods or services according to regulations and institution procedures. RECOMMENDATION The Institution should reinforce the established procedures and adhere to them before any payment is made for goods or services. The amount of $100,406.71 should be reimbursed to the U.S. Department of Education. In addition, UPM should be included in its procedures steps to adopting regulations, to verify that the vendor entity is not suspended or debarred or otherwise excluded from participating in the transaction. VIEWS OF RESPONSIBLE OFFICIALS See the Corrective Action Plan for details of action required.