Supplier contract compliance for not-for-profit and government

Not-for-profit organizations and government bodies buy through rules that most private businesses do not follow. Contracts may be awarded through a competitive process. Purchases may be paid from restricted grants.

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Prices may come from a cooperative contract that many agencies share. Fairview Audit connects you with a partner firm that compares what suppliers billed with what contracts allow. Fairview does not perform the review itself.

This page covers Supplier contract compliance for Not-for-profit and government organizations.

Why this pairing is specific

A supplier to a public body often wins on a bid or proposal. The price in that bid becomes the contract price. When an invoice later arrives at a different rate, the difference is a departure from an awarded contract, not just a billing error. That can matter for audit and for public accountability.

Cooperative or piggyback contracts add a twist. Your organization may buy off a contract that another agency negotiated. You need the base contract, the price list in force and your own participation agreement to know what is correct.

For not-for-profits with grants, the supplier cost may be charged to a specific award. A billing mistake can then affect a grant report as well as your budget. See grant and single audit compliance for the related category.

What a review typically examines

A partner firm compares contract terms with payment history. Common areas here include:

  • Awarded contract pricing against invoiced pricing, including price changes allowed by the contract and those that were not.
  • Cooperative contract purchases: whether the correct price list and discount tier were used.
  • Contract term and option year handling, including purchases made after a contract expired or beyond its stated scope.
  • Not-to-exceed amounts and whether spend is approaching them.
  • Facility and maintenance services, security, custodial and grounds contracts, checked against stated service levels and schedules.
  • Whether the supplier is owed or has already credited amounts for missed service, returned items or deductions.
  • Purchases that should carry sales tax exemption as a public or charitable body, where a vendor charged tax anyway. [VERIFY: exemption rules and documentation requirements in the relevant state]

Note: Public procurement law differs by jurisdiction. A partner firm reviews billing against contract terms and does not give legal opinions on procurement compliance.

What to have ready

  • The solicitation, the supplier's response and the awarded contract, with amendments and renewals.
  • Cooperative contract documents and your participation agreement, where used.
  • Purchase orders and payment history for each supplier.
  • Invoices with supporting records such as service logs or delivery receipts.
  • Grant award terms where costs are charged to an award.
  • Exemption certificates you provided to suppliers.
  • Contacts in finance, purchasing and the program offices.

Documentation for public accountability

Recipients of federal awards must keep records of each procurement, and other public bodies and grant funded organizations often must show how a supplier cost was approved. When a review finds a billing difference, keep the paper trail from award to payment. It helps when you raise the matter with the supplier or explain it to a board or funder.

How matching works

You choose a request path: larger business, smaller business or not sure. There is no fixed size cut-off. Fairview matches each request by hand. Your request goes to a matched partner firm or to Fairview for manual matching. Public bodies may have rules about engaging outside firms, which you would need to follow. The engagement and any fees are between you and the firm. [CONFIRM: which partner firms work with public bodies]

Who does the work

An independent partner firm that specializes in supplier contract compliance handles this work. Fairview Audit makes the match. We do not perform the review ourselves.

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Frequently asked questions

Can a government body use this service?

Possibly, subject to your own procurement rules. Check them before you engage a firm.

Does a review reopen the original bid?

No. It compares billing with the contract that was awarded.

Where can I read about contract drift?

See the article on why contract terms drift.

Find out what you are overpaying.

Tell us what you need reviewed. We match you by hand with an independent partner firm. You keep your existing vendors.

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Sources