Finding Text
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Criteria or Specific Requirement – Procurement and Suspension and Debarment
In accordance with 2 CFR Section 200.320, a non-federal entity must have and use documented procurement procedures consistent with the standards of Sections 200.317 - 200.320. These standards include a micro-purchase threshold of $10,000 and policies for formal procurement and non competitive procurement. Additionally, in accordance with 2 CFR Section 180.220, when a non-federal entity
enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction.
Condition – The Institute's micro-purchase threshold of $25,000 included in the policy is in excess of
2 CFR Section 200.320, and the Institute is not eligible for the increase to the micro-purchase threshold. Formal procurement and non competitive procurement policies have been documented; however, formalized documentation supporting the Institute is in compliance with policies did not exist. Additionally, there was no suspension and debarment check completed prior to purchases made with federal funds.
Questioned Costs – Total questioned costs of $45,000 were identified and represents value of equipment purchased for which the procurement process could not be supported in line with the Institute's policy and Uniform Guidance. Context – One purchase of $45,000 out of a total of three purchases totaling $152,986 subject to procurement requirements in 2023 was selected for testing. The Institute could not provide documentation supporting their purchase adhered to policies for formal procurement or non competitive procurement. Furthermore, a check of the vendor's suspension and debarment status prior to the purchase was not completed. The sample was not intended to be, and was not, a statistically valid sample.
Effect – Federal funds could be used to make an unauthorized purchase including paying an entity that is suspended or debarred.
Cause – The Institute's procurement policies are not in accordance with the Uniform Guidance, nor are there controls in place to ensure policies are followed, and lastly, there are no controls to ensure suspension and debarment checks are performed on vendors receiving federal funds.
Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that procurement policies and suspension and debarment checks on vendors are performed prior to making purchases with federal funds and are in alignment with the Uniform Guidance requirements.
Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.