Audit 25171

Identification of the Federal Program: Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing Number: 21.027, U.S. Department of the Treasury, 2021, OMB #1505-0271) 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 for all samples selected for testing, the City did not verify the vendor against the SAM to ensure the vendor was not suspended or debarred from federally-funded programs before the contract was entered into. Cause: The City does not have formal policies and process in place to ensure the suspension and debarment review process over vendors that provides goods or services to the City?s programs was conducted prior to enter into contract. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects. Questioned Costs: No questioned costs were noted. Context: See Condition above for context of the finding. Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommended the City develop policies and procedures to incorporate the suspension and debarment verification prior to awarding contracts. Views of Responsible Officials. Management concurs with the finding.

Identification of the Federal Program: Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing Number: 21.027, U.S. Department of the Treasury, 2021, OMB #1505-0271) 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 for all samples selected for testing, the City did not verify the vendor against the SAM to ensure the vendor was not suspended or debarred from federally-funded programs before the contract was entered into. Cause: The City does not have formal policies and process in place to ensure the suspension and debarment review process over vendors that provides goods or services to the City?s programs was conducted prior to enter into contract. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects. Questioned Costs: No questioned costs were noted. Context: See Condition above for context of the finding. Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommended the City develop policies and procedures to incorporate the suspension and debarment verification prior to awarding contracts. Views of Responsible Officials. Management concurs with the finding.