Audit 24462

Section III ? Federal Award Findings A. Current Year Findings and Questioned Costs ? Major Federal Award Program Audit 2022-001 Procurement and Suspension, and Debarment ? Internal Control over Verification Against the System for Award Management (?SAM?) Identification of the Federal Programs: Assistance Listing Number: 20.205 Assistance Listing Title: Highway Planning and Construction Federal Agency: Department of Transportation Pass-Through Entity: State of California Department of Transportation Federal Award Number and Award Year: CML-5044(104)/CML-5044(122)/CMLNI-5044(129)/STPL- 5044(131) Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Pass-Through Entity: N/A Federal Award Number and Award Year: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Suspension and Debarment, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our audit, we noted that the City did not have documentation on verifying the vendors against the SAM to ensure that they were not suspended or debarred from federally funded purchases. Cause: The City did not have a formal policy to require departments to perform suspension or debarment over vendors that the City makes contracts with federally-funded projects. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects, the City could be contracting with vendors that are prohibited from working on federally-funded projects. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to ensure vendors are not suspended or debarred from federally-funded purchases. View of Responsible Officials: Management concurs the finding.

Section III ? Federal Award Findings A. Current Year Findings and Questioned Costs ? Major Federal Award Program Audit 2022-001 Procurement and Suspension, and Debarment ? Internal Control over Verification Against the System for Award Management (?SAM?) Identification of the Federal Programs: Assistance Listing Number: 20.205 Assistance Listing Title: Highway Planning and Construction Federal Agency: Department of Transportation Pass-Through Entity: State of California Department of Transportation Federal Award Number and Award Year: CML-5044(104)/CML-5044(122)/CMLNI-5044(129)/STPL- 5044(131) Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Pass-Through Entity: N/A Federal Award Number and Award Year: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Suspension and Debarment, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our audit, we noted that the City did not have documentation on verifying the vendors against the SAM to ensure that they were not suspended or debarred from federally funded purchases. Cause: The City did not have a formal policy to require departments to perform suspension or debarment over vendors that the City makes contracts with federally-funded projects. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects, the City could be contracting with vendors that are prohibited from working on federally-funded projects. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to ensure vendors are not suspended or debarred from federally-funded purchases. View of Responsible Officials: Management concurs the finding.

Section III ? Federal Award Findings A. Current Year Findings and Questioned Costs ? Major Federal Award Program Audit 2022-001 Procurement and Suspension, and Debarment ? Internal Control over Verification Against the System for Award Management (?SAM?) Identification of the Federal Programs: Assistance Listing Number: 20.205 Assistance Listing Title: Highway Planning and Construction Federal Agency: Department of Transportation Pass-Through Entity: State of California Department of Transportation Federal Award Number and Award Year: CML-5044(104)/CML-5044(122)/CMLNI-5044(129)/STPL- 5044(131) Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Pass-Through Entity: N/A Federal Award Number and Award Year: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Suspension and Debarment, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our audit, we noted that the City did not have documentation on verifying the vendors against the SAM to ensure that they were not suspended or debarred from federally funded purchases. Cause: The City did not have a formal policy to require departments to perform suspension or debarment over vendors that the City makes contracts with federally-funded projects. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects, the City could be contracting with vendors that are prohibited from working on federally-funded projects. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to ensure vendors are not suspended or debarred from federally-funded purchases. View of Responsible Officials: Management concurs the finding.

Section III ? Federal Award Findings A. Current Year Findings and Questioned Costs ? Major Federal Award Program Audit 2022-001 Procurement and Suspension, and Debarment ? Internal Control over Verification Against the System for Award Management (?SAM?) Identification of the Federal Programs: Assistance Listing Number: 20.205 Assistance Listing Title: Highway Planning and Construction Federal Agency: Department of Transportation Pass-Through Entity: State of California Department of Transportation Federal Award Number and Award Year: CML-5044(104)/CML-5044(122)/CMLNI-5044(129)/STPL- 5044(131) Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Pass-Through Entity: N/A Federal Award Number and Award Year: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Suspension and Debarment, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our audit, we noted that the City did not have documentation on verifying the vendors against the SAM to ensure that they were not suspended or debarred from federally funded purchases. Cause: The City did not have a formal policy to require departments to perform suspension or debarment over vendors that the City makes contracts with federally-funded projects. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects, the City could be contracting with vendors that are prohibited from working on federally-funded projects. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City establish internal control procedures to monitor compliance requirements to ensure vendors are not suspended or debarred from federally-funded purchases. View of Responsible Officials: Management concurs the finding.