Finding Text
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement
procedures that are consistent with the standards outlined in that section.
If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be
obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified
acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b)
or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method
(i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in
accordance with 2 CFR 200.320(c)).
The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with
the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000,
a Vendor Justification Form (VJF) must be completed and documentation maintained to support the
selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum
of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive
purchase/bid procurements.
Condition: Procurement documentation for one vendor was not prepared, failing to support compliance
with the regulations above and the University’s procurement policy.
Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors
with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection,
the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding
regarding their application in this particular instance. Management believed that having the vendor
explicitly specified in the approved grant application exempted the University from following its
procurement policy.
Effect: Failure to properly perform the procedures required under the procurement process resulted in
noncompliance with the procurement requirement.
Questioned Costs: None
Identification of a repeat finding: N/A.
Recommendations: We recommend the University follow their procurement policies and procedures for
purchases using federal funds and maintain evidence that the required procurement procedures were
completed.
Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal
control to ensure that the procurement policy for purchases using federal funds is followed and that the
documents required for procurement are completed and maintained, including in circumstances where the
vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be
enforced for all purchases meeting the specific threshold amount when procuring using federal funds.