Direction ServiceNon-Profit

Type of Finding: Significant deficiency in internal control over compliance of Procurement, Suspension and Debarment Criteria ? Direction Service must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 when entering into a covered transaction and verify the vendor?s eligibility on the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA). Condition ? Direction Service entered into a new contract during the fiscal year whereas the vendor was not verified on the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and federal procurement standards were not followed by not obtaining price or rate quotations from an adequate number of qualified sources. Cause ? Procedures in place for procurement under federal awards were not followed. Effect ? A vendor contract was entered into without following internal control procedures and the expense could be disallowed. Questioned Costs - None Context ? During audit testing, all contracts over $25,000 were reviewed for compliance with procurement, suspension and debarment requirements. Direction Service entered into only one contract over $25,000 during the fiscal year. The Organization rarely enters into contracts exceeding $25,000. The vendor was subsequently verified on the SAM and found to not be suspended or debarred. The vendor has also been a long-term contractor with Direction Service and has significant knowledge of the program. Recommendations ? Before awarding a contract, Direction Service should check for suspension or debarment on the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) for all covered transactions. The Organization should also conduct all procurement transactions in a manner providing full and open competition, in accordance with standards set out at 2 CFR sections 200.318 through 200.326.