Finding Text
Criteria: CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.318 specifies that a non-federal entity must have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The nonfederal entity’s documented procurement procedures must conform to the procurement standards.
Condition: The Association does not have a formal procurement policy, including suspension and debarment, in compliance with Uniform Guidance.
Questioned costs: None.
Context: During the course of our audit, it was noted that the procurement policy in place at the Association is not in compliance with Uniform Guidance. There is also a lack of a suspension and debarment policy. Without a procurement or suspension and debarment policy, there is no clear guidance or framework for procurement activities or suspension and debarment, which increases the risk of non-compliance with applicable laws and regulations, as well as the risk of fraud, waste, and abuse.
Cause: The root cause of this finding is the lack of a formal procurement policy and suspension and debarment policy in compliance with Uniform Guidance. This may be due to a lack of awareness of the importance of such policies, or a lack of resources to develop and implement such a policy.
Effect: The auditor noted no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of policies over these compliance requirements provides an opportunity for noncompliance.
Recommendation: To address this finding, we recommend that the Association develop and implement a formal procurement policy that includes the following elements:
1. Procurement objectives and principles.
2. Roles and responsibilities of procurement personnel.
3. Procurement procedures, including vendor selection, contract award, and conflict of interest
management.
4. Procurement documentation requirements.
5. Procurement monitoring and reporting requirements.
6. Verification and documentation procedures that covered transactions are not made to parties that are suspended or debarred.
Views of responsible officials: There is no disagreement with the audit finding and will take the following actions:
1. Develop and implement a formal procurement policy by July 31, 2024
2. Assign responsibility for procurement policy development and implementation to Talana Lay, Board Secretary and Treasurer.
3. Provide training to procurement personnel on the new policy and procedures.