Young Women's Christian Association of Oahu

Criteria: In accordance with 2 CFR §200.318, non-federal entities must: (1) maintain and use documented procedures for procurement transactions under a Federal award or subaward, including the acquisition of property or services; (2) maintain written standards of conduct covering conflicts of interest and governing the actions of employees engaged in the selection, award, and administration of contracts; and (3) award contracts only to responsible contractors that possess the ability to perform successfully under the terms and conditions of the proposed contract. Additionally, 2 CFR §180.300 requires non-federal entities to verify that entities with which they plan to enter into a covered transaction are not suspended, debarred, or otherwise excluded from federal programs. Entities must retain documentation that procurements have been performed in compliance with these requirements and have internal controls over compliance built into their policies and procedures. Condition: The YWCA uses an expenditure approval matrix that supplements its procurement policy. The matrix establishes approval authority and spending thresholds, which were within federal procurement guidelines. The matrix also includes the requirements to review SAM.gov to verify vendors are not on the exclusion list. However, the matrix does not fully address all the requirements of 2 CFR §200.318, such as written standards of conduct for conflicts of interest and explicit procedures for awarding contracts only to responsible contractors. Additionally, while vendors were reviewed against SAM.gov, the YWCA does not have explicit procedures requiring documentation or retention of evidence of this verification in accordance with 2 CFR §180.300. Section III – Federal Award Findings and Questioned Costs (continued) Context: During the audit, we noted the YWCA expended $265,344 under the MBDA Capital Readiness Program for expenditures related to non-payroll related third-party vendors. We confirmed that the vendors contracted were not suspended or debarred. However, evidence of the verification process was not retained. Cause: The YWCA’s small size and limited familiarity with the detailed documentation requirements 2 CFR §200.318 and §180.300 contributed to reliance on a policy that does not address all federal procurement requirements or require formal documentation. Effect: Although the vendors tested during the audit period were eligible and the procurement thresholds were consistent with federal guidelines, the absence of a fully developed procurement policy and procedures for documenting suspension and debarment verification represents both a significant deficiency in internal control and an instance of immaterial noncompliance with Uniform Guidance. These gaps increase the risk of future noncompliance, contracting with ineligible vendors, questioned costs, or loss of federal funding. Questioned costs: None Identification of a repeat finding: N/A Recommendations: We recommend that the YWCA: (1) expand its procurement policy to fully comply with 2 CFR §200.318, including formal written standards of conduct and procedures for ensuring contracts are awarded only to responsible contractors; and (2) establish and document procedures to maintain evidence that contractors and vendors are not suspended, debarred, or otherwise excluded from participation in federal programs in accordance with 2 CFR §180.300. Views of Responsible Official: The YWCA subsequently drafted a policy that aims to comply with the requirements of 2 CFR §200.318 and revised existing procedures to maintain evidence that contractors and vendors are not suspended, debarred, or otherwise excluded from participation in federal programs in accordance with 2 CFR §180.300.

Criteria: In accordance with 2 CFR section 200.303, the YWCA must establish and maintain effective internal controls over Federal awards to provide reasonable assurance that the YWCA is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, these internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition, Cause & Context: During our audit, we noted that the YWCA did not have processes or controls in place to prepare, review and evaluate the Schedule of Expenditures of Federal Awards (SEFA) to determine its completeness and accuracy. The YWCA does not typically receive a significant amount of federal grants and has not previously had expenditures in excess of $750,000 that would require a single audit. Although there were processes in place to monitor the volume of federal expenditures, those processes did not include the preparation, review, and evaluation of the SEFA. Upon notification that a SEFA must be prepared, the YWCA provided a SEFA that appears to be complete and accurate. Effect: The absence of processes and controls indicates non-compliance with the requirements of 2 CFR section 200.303. The SEFA may not be complete or accurate and non-compliance with the requirements of 2 CFR section 200.510(b).

Criteria: In accordance with 2 CFR section 200.415, the YWCA is required to assure that expenditures are proper and in accordance with the terms and conditions of the federal award and approved project budget. The grant agreement required a final report and narrative to be submitted, including certification by an authorized individual of YWCA as noted in the guidance above. Condition, Cause & Context: The YWCA prepared and submitted a final report and narrative that appeared to be accurate and timely, but could not provide evidence or documentation that it was reviewed or certified upon submission. Effect: Noncompliance with 2 CFR section 200.415.