Audit 296829

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-002 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The purpose of the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program is to respond to the COVID-19 pandemic’s negative effects on public health and the economy, provide premium pay to essential workers during the pandemic, provide government services to the extent COVID-19 caused a reduction in revenues collected, and make necessary investments in water, sewer, or broadband infrastructure. In 2022, the County spent $985,217 in program funds. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that the contractors have not been suspended, debarred, or otherwise excluded. The County may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County’s controls were ineffective for ensuring that staff verified all parties receiving $25,000 or more in federal funds were not suspended or debarred. Specifically, County staff did not document on the SAM.gov printouts the date they verified three contractors’ suspension and debarment status. We consider this deficiency in internal controls to be a material weakness, which led to material noncompliance. Cause of Condition County staff were aware of the federal suspension and debarment verification requirements, and they normally verify this information during the procurement process. However, when these contracts were entered into, County staff did not recognize the need to document the date of the checks on the SAM.gov printouts. Effect of Condition Because the SAM.gov printouts were not dated, the County cannot demonstrate it complied with suspension and debarment requirements. Without adequate internal controls, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractors were not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred, and maintain documentation demonstrating compliance with this requirement. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2022-002 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The purpose of the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program is to respond to the COVID-19 pandemic’s negative effects on public health and the economy, provide premium pay to essential workers during the pandemic, provide government services to the extent COVID-19 caused a reduction in revenues collected, and make necessary investments in water, sewer, or broadband infrastructure. In 2022, the County spent $985,217 in program funds. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that the contractors have not been suspended, debarred, or otherwise excluded. The County may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County’s controls were ineffective for ensuring that staff verified all parties receiving $25,000 or more in federal funds were not suspended or debarred. Specifically, County staff did not document on the SAM.gov printouts the date they verified three contractors’ suspension and debarment status. We consider this deficiency in internal controls to be a material weakness, which led to material noncompliance. Cause of Condition County staff were aware of the federal suspension and debarment verification requirements, and they normally verify this information during the procurement process. However, when these contracts were entered into, County staff did not recognize the need to document the date of the checks on the SAM.gov printouts. Effect of Condition Because the SAM.gov printouts were not dated, the County cannot demonstrate it complied with suspension and debarment requirements. Without adequate internal controls, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractors were not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred, and maintain documentation demonstrating compliance with this requirement. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-001 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10283, LA-10284, LA 10156, LA-10151, LA-10157, LA – 10340, LA-10328, LA-9782, LA - 9920 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2022, the County spent $1,594,832 in Highway Planning and Construction grant funds. The County used this grant funding for the Washington State Department of Transportation Improvements project. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must keep documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County did not have controls in place to ensure staff verified one of two contractors paid more than $25,000 in Highway Planning and Construction grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition County staff responsible for the program said they were unable to create an account on SAM.gov. Instead, they searched the contractor’s status in a state-debarred contractors list. However, this website only lists contractors who are not allowed to work on public works projects in Washington due to violations of state law and does not list contractors who are debarred from participating in federally funded projects. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify that one of two contractors was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.

2022-002 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The purpose of the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program is to respond to the COVID-19 pandemic’s negative effects on public health and the economy, provide premium pay to essential workers during the pandemic, provide government services to the extent COVID-19 caused a reduction in revenues collected, and make necessary investments in water, sewer, or broadband infrastructure. In 2022, the County spent $985,217 in program funds. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that the contractors have not been suspended, debarred, or otherwise excluded. The County may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County’s controls were ineffective for ensuring that staff verified all parties receiving $25,000 or more in federal funds were not suspended or debarred. Specifically, County staff did not document on the SAM.gov printouts the date they verified three contractors’ suspension and debarment status. We consider this deficiency in internal controls to be a material weakness, which led to material noncompliance. Cause of Condition County staff were aware of the federal suspension and debarment verification requirements, and they normally verify this information during the procurement process. However, when these contracts were entered into, County staff did not recognize the need to document the date of the checks on the SAM.gov printouts. Effect of Condition Because the SAM.gov printouts were not dated, the County cannot demonstrate it complied with suspension and debarment requirements. Without adequate internal controls, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractors were not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred, and maintain documentation demonstrating compliance with this requirement. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2022-002 The County did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The purpose of the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program is to respond to the COVID-19 pandemic’s negative effects on public health and the economy, provide premium pay to essential workers during the pandemic, provide government services to the extent COVID-19 caused a reduction in revenues collected, and make necessary investments in water, sewer, or broadband infrastructure. In 2022, the County spent $985,217 in program funds. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that the contractors have not been suspended, debarred, or otherwise excluded. The County may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. Description of Condition Our audit found the County’s controls were ineffective for ensuring that staff verified all parties receiving $25,000 or more in federal funds were not suspended or debarred. Specifically, County staff did not document on the SAM.gov printouts the date they verified three contractors’ suspension and debarment status. We consider this deficiency in internal controls to be a material weakness, which led to material noncompliance. Cause of Condition County staff were aware of the federal suspension and debarment verification requirements, and they normally verify this information during the procurement process. However, when these contracts were entered into, County staff did not recognize the need to document the date of the checks on the SAM.gov printouts. Effect of Condition Because the SAM.gov printouts were not dated, the County cannot demonstrate it complied with suspension and debarment requirements. Without adequate internal controls, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractors were not suspended or debarred, so we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred, and maintain documentation demonstrating compliance with this requirement. County’s Response The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County will implement internal controls that ensures that staff who are responsible for purchasing goods or services with federal dollars are obtaining a written certification whether by language within a contract or documentation from SAM.gov are vendors that are not suspended or debarred from participating in federal programs. Auditor’s Remarks We appreciate the County’s commitment to resolving this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.