JA Worldwide, Inc.

Finding: Suspension and Debarment CFDA No. 98.001 USAID Foreign Assistance for Programs Overseas Agency for International Development (USAID), Award Number - 7200AA18CA00043, Award Year - 2018 Agency for International Development (USAID), Award Number - AID-OAA-A-17-00006, Award Year - 2017 Agency for International Development (USAID), Award Number - AID-176-A-17-00001, Award Year - 2017 Criteria: Suspension and debarment standards outlined in 2 CFR 200.213 restrict a non-federal entity from entering into contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition: Proper verification of vendors was not occurring prior to purchase to determine whether the vendors were suspended or debarred. Questioned Costs: None. Context: Of the four transactions selected for testing, three of the suspension and debarment verifications occurred subsequent to the purchase. Effect: Not verifying if vendors are suspended or debarred increases the risk that federal expenditures are paid to parties not allowed to receive federal funds. Cause: The Organization did not verify vendors were not suspended or debarred until requested as part of the audit process which was after the vendors had been paid. Identification as a repeat finding: Please refer to 2020-002. Recommendation: We recommend the Organization revise its policies and procedures to verify the vendor is not suspended or debarred prior to the purchase or at the beginning of each year if the contract with the vendor is a multi-year relationship. Views of responsible officials: The Organization agrees with the finding. See separate report for planned corrective actions.

FISCAL YEAR OF FINDING: Twelve months ended June 30, 2021 AUDITOR FINDING: Finding: Procurement and Suspension and Debarment CFDA No. 98.001 USAID Foreign Assistance for Programs Overseas ? Agency for International Development (USAID), Award Number - 7200AA18CA00043, Award Year - 2018 ? Agency for International Development (USAID), Award Number - AID-OAA-A-17-00006, Award Year - 2017 ? Agency for International Development (USAID), Award Number - AID-176-A-17-00001, Award Year - 2017 Criteria: Suspension and debarment standards outlined in 2 CFR 200.213 restrict a non-federal entity from entering into contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition: Proper verification of vendors was not occurring prior to purchase to determine whether the vendors were suspended or debarred. Questioned Costs: None. Context: Of the four transactions selected for testing, three of the suspension and debarment verifications occurred subsequent to the purchase. Effect: Not verifying if vendors are suspended or debarred increases the risk that federal expenditures are paid to parties not allowed to receive federal funds. Cause: The Organization did not verify vendors were not suspended or debarred until requested as part of the audit process which was after the vendors had been paid. Identification as a repeat finding: Please refer to 2020-002. Recommendation: We recommend the Organization revise its policies and procedures to verify the vendor is not suspended or debarred prior to the purchase or at the beginning of each year if the contract with the vendor is a multi-year relationship. CLIENT PLANNED ACTION: The repeat finding, although addressed and reviewed last year with all JA personnel directly involved in the delivery and reporting of USAID grants, will have enhanced controls implemented this fiscal year addressing this issue. Measures will be taken to enhance controls via the internal grant tracking tool, Smartsheet, which is employed simultaneously by both JA Worldwide staff and JA field offices administering the grants. Furthermore, a meeting will be conducted as a reminder to everyone directly involved with the grants regarding the procedures in place, along with all reporting due dates. CLIENT RESPONSIBLE PARTY: Joseph Tortora, CFO COMPLETION DATE: October 31, 2021

2020-002

Finding: Procurement and Suspension and Debarment CFDA No. 98.001 USAID Foreign Assistance for Programs Overseas Agency for International Development (USAID), Award Number - 7200AA18CA00043, Award Year - 2018 Agency for International Development (USAID), Award Number - AID-OAA-A-17-00006, Award Year - 2017 Agency for International Development (USAID), Award Number - AID-176-A-17-00001, Award Year - 2017 Criteria: General procurement standards outlined in 2 CFR 200.318(a) state that a non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified by the Uniform Guidance (sections 200.318 - 200.326). The Uniform Guidance outlines requirements over the proper oversight of contractors, having written standards of conduct for employees involved in contracting, awarding contracts to responsible contractors, maintaining records documenting the history of procurements including cost price analysis, conducting all transactions in a manner which provides full and open competition, utilizing the methods of procurement outlined in the Uniform Guidance, and ensuring every purchase order or contract includes the applicable provisions in Appendix II. Suspension and debarment standards outlined in 2 CFR 200.213 restrict a non-federal entity from entering into contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition: The Organization's policies and procedures over procurement do not conform to the requirements outlined by the Uniform Guidance as several required policies and procedures are not included. In addition, proper review of purchases was not occurring prior to payment to determine if the expenditure was procured in a manner that was consistent with the policy as well as verifications that the vendors were not suspended or debarred. Questioned Costs: None. Context: We compared the Organization's policies and procedures to the applicable sections of the Uniform Guidance. In addition, we tested a population of 157 transactions qualifying for the procurement of goods and services and selected 24 of the transactions for testing. A non-statistical sampling methodology was used to select the sample. Of the 24 transactions selected for testing, three transactions did not have proper review of documentation to verify the transaction was properly procured within the policy thresholds. Of the 24 transactions selected for testing, 16 of the suspension and debarments verifications occurred subsequent to the end of the fiscal year. Effect: Not procuring goods and services in accordance with requirements outlined by the Uniform Guidance increases the risk that federal expenditures are not being used properly. Not verifying if vendors are suspended or debarred increased the risk that federal expenditures are paid to parties not allowed to receive federal funds. Cause: The Organization's policies were not compared to Uniform Guidance to ensure all elements were incorporated prior to adoption. The Organization also did not obtain or maintain documentation from the local area offices to determine expenditures were properly procured under the Organization's policy. The Organization did not verify vendors were not suspended or debarred until requested as part of the audit process which was subsequent to the end of the fiscal year and after the expenditures had been paid to the vendor. Identification as a repeat finding: Not applicable. Recommendation: We recommend the Organization revise its policies and procedures to conform to the requirements of Uniform Guidance as soon as possible. In addition, invoices for expenditures should be reviewed and compared to the procurement policy to determine expenditures are procured in the correct manner under the policy as well as verifying the vendor is not suspended or debarred prior to the purchase or at the beginning of each year if the contract with the vendor is a multi-year relationship. Views of responsible officials: The Organization agrees with the finding. See separate report for planned corrective actions.

AUDITOR FINDING: Finding: Procurement and Suspension and Debarment CFDA No. 98.001 USAID Foreign Assistance for Programs Overseas Agency for International Development (USAID), Award Number - 7200AA18CA00043, Award Year - 2018 Agency for International Development (USAID), Award Number - AID-OAA-A-17-00006, Award Year - 2017 Agency for International Development (USAID), Award Number - AID-176-A-17-00001, Award Year - 2017 Criteria: General procurement standards outlined in 2 CFR 200.318(a) state that a non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified by the Uniform Guidance (sections 200.318 - 200.326). The Uniform Guidance outlines requirements over the proper oversight of contractors, having written standards of conduct for employees involved in contracting, awarding contracts to responsible contractors, maintaining records documenting the history of procurements including cost price analysis, conducting all transactions in a manner which provides full and open competition, utilizing the methods of procurement outlined in the Uniform Guidance, and ensuring every purchase order or contract includes the applicable provisions in Appendix II. Suspension and debarment standards outlined in 2 CFR 200.213 restrict a non-federal entity from entering into contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition: The Organization's policies and procedures over procurement do not conform to the requirements outlined by the Uniform Guidance as several required policies and procedures are not included. In addition, proper review of purchases was not occurring prior to payment to determine if the expenditure was procured in a manner that was consistent with the policy as well as verifications that the vendors were not suspended or debarred. Questioned Costs: None. Context: We compared the Organization's policies and procedures to the applicable sections of the Uniform Guidance. In addition, we tested a population of 157 transactions qualifying for the procurement of goods and services and selected 24 of the transactions for testing. A non-statistical sampling methodology was used to select the sample. Of the 24 transactions selected for testing, three transactions did not have proper review of documentation to verify the transaction was properly procured within the policy thresholds. Of the 24 transactions selected for testing, 16 of the suspension and debarments verifications occurred subsequent to the end of the fiscal year. Effect: Not procuring goods and services in accordance with requirements outlined by the Uniform Guidance increases the risk that federal expenditures are not being used properly. Not verifying if vendors are suspended or debarred increased the risk that federal expenditures are paid to parties not allowed to receive federal funds. Cause: The Organization's policies were not compared to Uniform Guidance to ensure all elements were incorporated prior to adoption. The Organization also did not obtain or maintain documentation from the local area offices to determine expenditures were properly procured under the Organization's policy. The Organization did not verify vendors were not suspended or debarred until requested as part of the audit process which was subsequent to the end of the fiscal year and after the expenditures had been paid to the vendor. Identification as a repeat finding: Not applicable. Recommendation: We recommend the Organization revise its policies and procedures to conform to the requirements of Uniform Guidance as soon as possible. In addition, invoices for expenditures should be reviewed and compared to the procurement policy to determine expenditures are procured in the correct manner under the policy as well as verifying the vendor is not suspended or debarred prior to the purchase or at the beginning of each year if the contract with the vendor is a multi-year relationship. CLIENT PLANNED ACTION: Expense and procurement policies and procedures have been updated and the update shared with JA Worldwide?s auditors, BKD. Edits to the initial were made based on feedback from BKD addressing all points in the above finding. In addition, the expense and procurement policies and procedures include web hyperlinks directing the responsible JA offices to applicable USAID or other US Government (USG) websites as needed. The policies and procedures laid out detailed procedures which comply with current USG policies and guidance. The updated expense and procurement policies and procedures have been disseminated to all Regional Operating Finance & Operations heads with instructions to share the update with all offices and areas receiving USG funding. We will be reviewing applicable policies at least annually and when new guidance is issued by USAID or the USG and update our expense and procurement policies and procedures as needed. CLIENT RESPONSIBLE PARTY: Mark Kripp, CFO COMPLETION DATE: Completed, October 20, 2020 (new expense and procurement policies and procedures) with ongoing updates as needed.