KQED INC.Non-Profit

Criteria or specific requirement: Non-federal entities who procure goods and services under federal grants must follow the procurement standards outlined in 2 CFR 200.318-326. Among the standards outlined above are prescribed procurement methodologies which vary based on the size of the procurement, among other things. Entities must use the small purchase methodology explained in 2 CFR 200.320(b) for procurements that exceed the micro-purchase threshold of $10,000 but do not exceed the simplified acquisition threshold of $250,000. KQED engaged five different vendors on this federal award which fell into this category. Under the small purchase method, price or rate quotations must be obtained from an adequate number of qualified sources. In addition to the standards mentioned above, non-federal entities are prohibited from contracting with parties that are suspended and debarred from doing business directly with the federal government or as a vendor on a federal government grant as outlined in 2 CFR Parts 180 and 200. When a non-federal entity enters into a procurement in excess of $25,000 with another entity, the non-federal entity must verify that such entity is not suspended or debarred or otherwise excluded from participating in the transaction, which can be accomplished by checking the System for Award Management (SAM) Exclusions, the federal database for suspended and debarred companies. Conditions: During the audit of procurement requirements, we tested 3 of the 5 procurements in the small purchase category and noted one for approximately $32,000 for which there was no evidence of obtaining rate or price quotations from an adequate number of qualified vendors before a vendor was selected and the procurement was made. We expanded our sample to include the other 2 procurements in this category and found that requirements for small purchases were complied with by obtaining quotations from qualified vendors for these procurements. During the audit of suspension and debarment requirements, it was noted that no SAM search was performed for 2 of 3 vendors tested for which KQED entered into transactions over $25,000. It appears that SAM search was performed for vendors selected at the start of the grant but the search was omitted for the vendors enlisted at a later date during the grant period. Subsequent to our discovery, SAM searches were performed by management for the 2 vendors which showed that the vendors mentioned above were not suspended, debarred, or excluded from participating in the transaction. We expanded our sample to include the other 1 transaction over $25,000 and found that a SAM search was timely performed for the vendor. Context: While KQED has a written procurement policy that meets the requirements of 2 CFR 200.318-326, it is important for management to ensure that the policy is followed by employees responsible for making procurements under federal grants. Effect: Not implementing the procurement policy could lead to noncompliance with the procurement standards. By not recording vendor quotes during the procurement process, documentation regarding vendor selection may not be properly supported. Entering into transactions with vendors prior to conducting a SAM search may lead to transacting with vendors that are suspended, debarred, and excluded from participating in federally-funded grant projects. Cause: Responsible employees did not consistently follow KQED?s established policy during the grant period. Questioned cost: None. Recommendation: It is recommended that the procurement policy, including the procedures around SAM search for suspension and debarment, be recommunicated and reinforced with accountable officials. Documentation of the procurement process, such as quotes obtained and SAM searches, can also be maintained for proper evidence of controls taking place. Views of responsible officials (unaudited): Management concurs.