THE CARTER CENTER, INC.

During our substantive testwork over allowable costs, the engagement team selected a sample of forty (40) transactions which were charged to the CSO award. Within our sample, we identified two transactions, relating to one subrecipient, for which no documentation supporting its allowability was provided by the Center and therefore was inappropriately charged to the CSO award. Further, it was identified that the related subrecipient was not a subrecipient under the CSO award.

Finding No. 2021-001 Procurement and Suspension and Debarment Federal Program: Act to End NTDs East CFDA Number: 98.001 Federal Agency: U.S. Agency for International Development (USAID) Federal Award Year: October 1, 2020 to September 30, 2021 Criteria or Requirement Under 2 CFR section 180.220, non-federal entities are prohibited from contracting with or making subawards under covered transactions including those procurement contracts for goods and services awarded under a nonprocurement transaction that are expected to equal or exceed $25,000 to parties that are suspended or debarred. Condition Found, Including Facts That Support the Deficiency Identified in the Finding and Information to Provide Proper Perspective for Judging the Prevalence and Consequences of the Finding During our testwork over vendors, we selected a sample of 10 vendors that were paid with USAID funding from the Center. Within our sample, we noted that for one of the 10 vendors, evidence of management?s control to determine whether the vendor was suspended or debarred prior to entering into the transaction could not be provided. Cause and Possible Asserted Effect Management lacks a systemic process to ensure that documentation of its determination of vendor and subrecipient suspension or debarment status is obtained prior to entering into a transaction and subsequently retained. As a result, documentation of vendor and subrecipient suspension or debarment status of vendors and subrecipients could not be provided. Questioned Cost There were no questioned costs associated with the finding. Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Identification of whether the audit finding was a repeat of a finding in the immediately prior audit This is a repeat finding from the prior audit; finding no. 2020-001. Recommendation We recommend that the Center enhance its policies and procedures to ensure all documentation for procurement transactions is obtained and retained to support its compliance with vendor and subrecipient suspension and debarment requirements prior to the initiation of a transaction. View of Responsible Officials Management concurs with the finding. The Center will review and strengthen all existing policies and procedures related to procurement, including vendor and subrecipient suspension and debarment and the related document retention. Within 30 days of this report?s submission, the Center will re-confirm and formally document vendor and subrecipient clearance with cumulative transactions in excess of $5,000 for the year.

Finding No. 2020-001 Procurement and Suspension and Debarment Federal Programs: Foreign Assistance for Programs Overseas ? Onchocerciasis Elimination Program for the Americas; Tunisia International Observation of National Elections Project CFDA Number: 98.001 Federal Agency: U.S. Agency for International Development (USAID) Federal Award Year: September 30, 2019 to September 29, 2020 May 17, 2019 to September 30, 2020 Criteria or Requirement Under 2 CFR section 180.220, non-federal entities are prohibited from contracting with or making subawards under covered transactions including those procurement contracts for goods and services awarded under a nonprocurement transaction that are expected to equal or exceed $25,000 to parties that are suspended or debarred. Condition Found, Including Facts That Support the Deficiency Identified in the Finding and Information to Provide Proper Perspective for Judging the Prevalence and Consequences of the Finding During our testwork over vendors, we selected a sample of 14 vendors that were paid with USAID funding from the Center. Within our sample, that for two of the 14 vendors, evidence of management's control to determine whether the vendor was suspended or debarred prior to entering into the transaction could not be provided. Cause and Possible Asserted Effect Management lacks a systemic process to ensure that documentation of its determination of vendor and subrecipient suspension or debarment status is obtained prior to entering into a transaction. As a result, documentation of vendor and subrecipient suspension or debarment status of vendors and subrecipients could not be provided. Questioned Cost There were no questioned costs associated with the finding. Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Identification of whether the audit finding was a repeat of a finding in the immediately prior audit This is a repeat finding from the prior audit; finding no. 2019-001. Recommendation We recommend that the Center enhance its policies and procedures to ensure all documentation for procurement transactions is obtained to support its compliance with vendor and subrecipient suspension and debarment requirements prior to the initiation of a transaction. View of Responsible Officials Management concurs with the finding. The Center will review and strengthen all existing policies and procedures related to procurement, including vendor and subrecipient suspension and debarment and the related document retention. Within 30 days of this report?s submission, the Center will re-confirm and formally document vendor and subrecipient clearance with cumulative transactions in excess of $5,000 for the year.

Finding No. 2020-002 Procurement and Suspension and Debarment Federal Programs: Foreign Assistance for Programs Overseas ? Onchocerciasis Elimination Program for the Americas CFDA Number: 98.001 Federal Agency: U.S. Agency for International Development (USAID) Federal Award Year: September 30, 2019 to September 29, 2020 Criteria or Requirement Under 2 CFR section 200.319, all procurement transactions must be conducted in a manner providing full and open competition. Under 2 CFR section 200.320, procurement by noncompetitive proposals from only one source may be used in certain limited circumstances. Condition Found, Including Facts That Support the Deficiency Identified in the Finding and Information to Provide Proper Perspective for Judging the Prevalence and Consequences of the Finding During our testwork over procurement, we selected a total population of 15 vendors subject to procurement requirements and related contract files. Within our sample we noted a lack of supporting documentation for two sole source vendors to determine whether the vendor was contracted under the principles of open competition and whether the source sole criteria were met. Cause and Possible Asserted Effect Management lacks a systemic process to ensure that documentation of its determination of sole source vendors maintained in vendor contract files. As a result, sole source documentation could not be provided. Questioned Cost There were no questioned costs associated with the finding. Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Identification of whether the audit finding was a repeat of a finding in the immediately prior audit This is a repeat finding from the prior audit; finding no. 2019-002. Recommendation We recommend that the Center enhance its policies and procedures to ensure all documentation for sole source procurement is obtained and maintained to support its compliance with procurement provisions. View of Responsible Officials Management concurs with the finding. The Center will review and strengthen all existing policies and procedures related to procurement, with specific attention to sole source documentation. Within 30 days of the report?s submission, the Center will document the specific reasons for sole sourcing the noted vendor exceptions and will begin a formal review process of sole source documentation when required under the Center?s procurement policies.

During our testwork over subrecipients, we selected a sample of seven subrecipients that received USAID funding from the Center. Within our sample, we noted a lack of a documented control for five out of the seven subrecipients to determine whether the subrecipient was suspended or debarred prior to entering into the transaction. During our testwork over vendors, we selected a sample of six vendors that were paid with USAID funding from the Center. Within our sample, we noted a lack of documented control for three out of the six vendors to determine whether the vendor was suspended or debarred prior to entering into the transaction.

During our testwork over procurement, we selected a total population of eight vendors subject to procurement requirements and related contract files. Within our sample we noted a lack of supporting documentation for three sole source vendors to determine whether the vendor was contracted under the principles of open competition and whether the source sole criteria were met.

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