Finding 968073 (2023-005)

Material Weakness
Requirement
I
Questioned Costs
-
Year
2023
Accepted
2024-04-01
Audit: 302075
Organization: Johnson C. Smith University (NC)
Auditor: Bdo USA PC

AI Summary

  • Core Issue: The University failed to document a proper competitive bidding process and did not review the federal suspension and debarment database before fund disbursement.
  • Impacted Requirements: Non-compliance with federal procurement guidelines, including documentation for contractor selection and justification for lack of competition.
  • Recommended Follow-Up: Enhance internal controls and formalize procurement policies to ensure compliance with federal purchasing regulations and improve staff training on these requirements.

Finding Text

Federal Program Information: Higher Education Institutional Aid: Strengthening Historically Black Colleges and Universities Program (ALN: 84.031B and 84.031E) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): I. Procurement and Suspension and Debarment – The Uniform Guidance requires recipients of federal awards to have adequate procedures and controls in place to ensure that the procurement transactions are properly documented in the entity’s files, provide full and open competition supported by a cost or price analysis, provide a vendor debarment or suspension certification, provide for retention of files, and that supporting documentation corroborates compliance with these requirements. All procurement transactions are required to be conducted in a manner to provide, to the maximum extent practical, open and free competition. Additionally, procurement records and files for purchases in excess of the small purchase threshold ($25,000) shall include a) a basis for contractor selection, b) justification for the lack of competition when competitive bids or offers are not obtained, and c) a basis for award cost or price. Organizations are also required to be alert to any organizational conflicts of interest (2 CFR 215.40 – 215.48). Condition: The University was unable to provide documentation supporting an appropriate competitive bidding process, sole source justification and/or appropriate review of the federal suspension and debarment database prior to the disbursement of funds. Cause: Insufficient administrative oversight and internal controls over procurement compliance requirements. Effect or Potential Effect: The University was not in compliance with procurement compliance requirements. Questioned Costs: None. Context: For 5 of 5 procurement transactions tested, the University was unable to provide documentation supporting an appropriate competitive bidding process, sole source justification and/or appropriate review of the federal suspension and debarment database prior to the disbursement of funds. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the University enhance its internal controls and implement formal policies and procedures to ensure that its personnel, especially those responsible for making procurement decisions, are aware of and comply with all federal purchasing rules and regulations. Views of Responsible Officials: The University eliminated the position of Procurement Manager several years back, which decentralized the responsibility for procurement. The change led to a loss of institutional knowledge, and interrupted policy and process enforcement campus wide. GSPAR will enhance its internal controls and implement formal policies and procedures to ensure that those responsible for procurement activities are aware of, and comply with, all federal purchasing rules and regulations. The GSPAR will ensure the appropriate documentation related to debarment, sole source justification and bidding process are received, or attached to the purchasing requisition, prior to approving purchases. In addition, the grant onboarding process will be revised to emphasize key federal regulations and emphasize the importance of compliance. Reminders will also be provided during GSPAR’s semi-annual grant compliance workshops.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 391625 2023-004
    Material Weakness
  • 391626 2023-004
    Material Weakness
  • 391627 2023-004
    Material Weakness
  • 391628 2023-004
    Material Weakness
  • 391629 2023-004
    Material Weakness
  • 391630 2023-005
    Material Weakness
  • 391631 2023-005
    Material Weakness
  • 391632 2023-006
    Significant Deficiency
  • 391633 2023-006
    Significant Deficiency
  • 391634 2023-007
    Significant Deficiency
  • 391635 2023-007
    Significant Deficiency
  • 391636 2023-008
    Significant Deficiency
  • 391637 2023-008
    Significant Deficiency
  • 391638 2023-008
    Significant Deficiency
  • 391639 2023-010
    -
  • 968067 2023-004
    Material Weakness
  • 968068 2023-004
    Material Weakness
  • 968069 2023-004
    Material Weakness
  • 968070 2023-004
    Material Weakness
  • 968071 2023-004
    Material Weakness
  • 968072 2023-005
    Material Weakness
  • 968074 2023-006
    Significant Deficiency
  • 968075 2023-006
    Significant Deficiency
  • 968076 2023-007
    Significant Deficiency
  • 968077 2023-007
    Significant Deficiency
  • 968078 2023-008
    Significant Deficiency
  • 968079 2023-008
    Significant Deficiency
  • 968080 2023-008
    Significant Deficiency
  • 968081 2023-010
    -

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $10.52M
84.063 Federal Pell Grant Program $4.17M
84.031 Higher Education_institutional Aid $804,354
84.007 Federal Supplemental Educational Opportunity Grants $516,103
84.047 Trio_upward Bound $512,136
84.033 Federal Work-Study Program $383,198
93.317 Emerging Infections Programs $335,646
84.042 Trio_student Support Services $299,220
84.120 Minority Science and Engineering Improvement $286,874
15.932 Preservation of Historic Structures on the Campuses of Historically Black Colleges and Universities (hbcus). $278,558
47.076 Education and Human Resources $241,588
84.425 Education Stabilization Fund $223,668
84.217 Trio_mcnair Post-Baccalaureate Achievement $187,534
45.313 Laura Bush 21st Century Librarian Program $81,812
84.335 Child Care Access Means Parents in School $79,262
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $49,093
89.003 National Historical Publications and Records Grants $40,027
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $36,767
17.268 H-1b Job Training Grants $36,165
97.061 Centers for Homeland Security $28,231
12.598 Centers for Academic Excellence $26,832
45.310 Grants to States $13,120
11.028 Connecting Minority Communities Pilot Program $6,306
45.162 Promotion of the Humanities_teaching and Learning Resources and Curriculum Development $5,272
93.859 Biomedical Research and Research Training $2,960
84.038 Federal Perkins Loan Program $0