Finding Text
Material Weakness in Internal Control over Compliance and Material Noncompliance
Research and Development Cluster
Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR 200.318 through 200.326. They must use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurement standards conform to the applicable federal statutes and the procurement requirements identified in 2 CFR part 200.
Condition: The Organization has a procurement policy in place; however, the Organization is not consistently following the procurement policy.
During the period of the contracts with these provisions, the Organization did not have a control structure in place to monitor compliance with procurement requirements. Consequently, for four (4) of four (4) contracts tested, the procurement policy was not followed and no documentation to reflect compliance with Uniform Guidance requirements related to procurement could be provided.
Cause: The Organization did not have proper controls in place to monitor compliance with the procurement.
Effect or potential effect: The procurement policy retained by the Organization has not been updated to confirm to the Organization’s current operations. The Organization could become noncompliant with the requirements of the Uniform Guidance, resulting in findings and questioned costs related to dollar amounts being expended to vendors. Additionally, the Organization could become ineligible to receive funds from federal entities or may have to issue refunds to federal entities.
Questioned costs: None.
Context: Our sample was not intended to be statistically valid.
Recommendation: The Organization should update its procurement policy to reflect current operations. Additionally, the Organization should review the current procurement operations in conjunction with the review of the procurement policies to ensure that all practices and policies conform to the standards promulgated by the CFR.
Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report.
Identification of prior year finding: 2021-005