Finding 977721 (2023-003)

Finding 2023-003 Significant deficiency in internal control over compliance for procurement standards Federal Agency: United States Agency for International Development Program Titles: USAID Foreign Assistance for Programs Overseas Assistance Listing Number: 98.001 Pass-Through Entity: N/A Award Numbers: 72065618CA00001 Award Periods: May 14, 2018 through April 23, 2024 Criteria Internal controls requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.320, Internal Controls, require that a non‐Federal entity can use noncompetitive procurement if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source: (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation: (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity or: (5) After solicitation of a number of sources, competition is determined inadequate. Condition/Context In our sampling of procurement transactions, we found two procurements utilizing the noncompetitive procurement method that did not contain adequate justification for the use of the noncompetitive procurement method. Management asserted to have requested and obtained approval from the funder. However, the communication we examined between VillageReach and USAID did not explicitly authorize the use of this specific vendor for these noncompetitive procurement transactions. Cause The Organization’s justification for the use of the noncompetitive method was not adequately documented. Effect The use of the noncompetitive procurement method was not adequately justified given the documentation tested. Questioned Costs Not determinable Repeat Finding No Recommendation We recommend the Organization enforces the use of its noncompetitive procurement justification form and ensure that the applicable circumstance is adequately documented and justified. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.