2023-001 FFATA Reporting
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of Housing and Urban Development
Program: 14.218 Community Development Block Grant
Award Number and Year: B-16-MC-27-0003, 2016; B-17-MC-27-0003, 2017; B-18-MC-27-0003, 2018; B-19-MC-27-0003, 2019; B-20-MC-27-003, 2020; B-20-MW-27-003, 2020; B-21-MC-27-0003, 2021; B-22-MC-27-0003, 2022; B-23-MC-27-0003, 2023
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in Title 2 U.S. Code of Federal Regulations, Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the month following the month in which the obligation was made.
Condition: The City reported subawards related to the 2023 Community Development Block Grant (CDBG) award in an annual report in March 2024 when the documentation was requested for audit.
Questioned Costs: None.
Context: The City has filed annual FFATA reports for CDBG grants years 2020 through 2023, including 2020CV.
Effect: The City is not in compliance with FFATA reporting requirements.
Cause: We were informed the federal awarding agency did not immediately load the City’s 2023 CDBG award into FSRS. City staff initially monitored FSRS on a monthly basis; however, monitoring efforts were not maintained. Upon this information being requested for audit purposes, City staff verified the award had been loaded into FSRS and submitted the report.
Recommendation: We recommend the City implement procedures to ensure reports are submitted as required by FFATA.
View of Responsible Official: Concur
2023-001 FFATA Reporting
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of Housing and Urban Development
Program: 14.218 Community Development Block Grant
Award Number and Year: B-16-MC-27-0003, 2016; B-17-MC-27-0003, 2017; B-18-MC-27-0003, 2018; B-19-MC-27-0003, 2019; B-20-MC-27-003, 2020; B-20-MW-27-003, 2020; B-21-MC-27-0003, 2021; B-22-MC-27-0003, 2022; B-23-MC-27-0003, 2023
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in Title 2 U.S. Code of Federal Regulations, Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the month following the month in which the obligation was made.
Condition: The City reported subawards related to the 2023 Community Development Block Grant (CDBG) award in an annual report in March 2024 when the documentation was requested for audit.
Questioned Costs: None.
Context: The City has filed annual FFATA reports for CDBG grants years 2020 through 2023, including 2020CV.
Effect: The City is not in compliance with FFATA reporting requirements.
Cause: We were informed the federal awarding agency did not immediately load the City’s 2023 CDBG award into FSRS. City staff initially monitored FSRS on a monthly basis; however, monitoring efforts were not maintained. Upon this information being requested for audit purposes, City staff verified the award had been loaded into FSRS and submitted the report.
Recommendation: We recommend the City implement procedures to ensure reports are submitted as required by FFATA.
View of Responsible Official: Concur
2023-002 Suspension and Debarment and Build America, Buy America Act
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of Transportation
Program: 20.205 Highway Planning and Construction
20.205 COVID-19 - Highway Planning and Construction
Award Number and Year: Not provided, 2023
Pass-Through Agency: Minnesota Department of Transportation
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000.
The City’s procurement policy requires a suspension and debarment clause be included in the contract and also requires the contract manager to verify the vendor is not suspended, debarred, or otherwise excluded at SAM.gov.
Additionally, section 70914 of the Build America, Buy America Act (BABA), requires a Buy America preference be included in the terms and conditions of each award with an infrastructure project.
Condition: The contract in one of four projects tested did not include the suspension and debarment clause or the BABA preference. In addition, the City did not verify suspension and debarment before entering into the contract.
Questioned Costs: None.
Context: Four of eight contracts were tested for compliance with applicable federal regulations.
The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits.
Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded may result in the City entering into a transaction with a vendor that is not authorized to provide goods and services. Also, failure to include the BABA requirements in the contract may result in construction materials used in the project not complying with the requirement of the BABA.
Cause: Federal requirements were not followed as the project was initially planned without the use of federal funds.
Recommendation: We recommend the City review its written policies and procedures and communicate with contract managers/administrators their responsibility for complying with the federal regulations and maintaining documentation to support that compliance.
View of Responsible Official: Concur
2023-002 Suspension and Debarment and Build America, Buy America Act
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of Transportation
Program: 20.205 Highway Planning and Construction
20.205 COVID-19 - Highway Planning and Construction
Award Number and Year: Not provided, 2023
Pass-Through Agency: Minnesota Department of Transportation
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000.
The City’s procurement policy requires a suspension and debarment clause be included in the contract and also requires the contract manager to verify the vendor is not suspended, debarred, or otherwise excluded at SAM.gov.
Additionally, section 70914 of the Build America, Buy America Act (BABA), requires a Buy America preference be included in the terms and conditions of each award with an infrastructure project.
Condition: The contract in one of four projects tested did not include the suspension and debarment clause or the BABA preference. In addition, the City did not verify suspension and debarment before entering into the contract.
Questioned Costs: None.
Context: Four of eight contracts were tested for compliance with applicable federal regulations.
The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits.
Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded may result in the City entering into a transaction with a vendor that is not authorized to provide goods and services. Also, failure to include the BABA requirements in the contract may result in construction materials used in the project not complying with the requirement of the BABA.
Cause: Federal requirements were not followed as the project was initially planned without the use of federal funds.
Recommendation: We recommend the City review its written policies and procedures and communicate with contract managers/administrators their responsibility for complying with the federal regulations and maintaining documentation to support that compliance.
View of Responsible Official: Concur
2023-002 Suspension and Debarment and Build America, Buy America Act
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of Transportation
Program: 20.205 Highway Planning and Construction
20.205 COVID-19 - Highway Planning and Construction
Award Number and Year: Not provided, 2023
Pass-Through Agency: Minnesota Department of Transportation
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000.
The City’s procurement policy requires a suspension and debarment clause be included in the contract and also requires the contract manager to verify the vendor is not suspended, debarred, or otherwise excluded at SAM.gov.
Additionally, section 70914 of the Build America, Buy America Act (BABA), requires a Buy America preference be included in the terms and conditions of each award with an infrastructure project.
Condition: The contract in one of four projects tested did not include the suspension and debarment clause or the BABA preference. In addition, the City did not verify suspension and debarment before entering into the contract.
Questioned Costs: None.
Context: Four of eight contracts were tested for compliance with applicable federal regulations.
The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits.
Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded may result in the City entering into a transaction with a vendor that is not authorized to provide goods and services. Also, failure to include the BABA requirements in the contract may result in construction materials used in the project not complying with the requirement of the BABA.
Cause: Federal requirements were not followed as the project was initially planned without the use of federal funds.
Recommendation: We recommend the City review its written policies and procedures and communicate with contract managers/administrators their responsibility for complying with the federal regulations and maintaining documentation to support that compliance.
View of Responsible Official: Concur
2023-003 Procurement, Suspension, and Debarrment
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of the Treasury
Program: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds
Award Number and Year: SLT0790, 2021; E-20-MW-27-0003, 2020
Pass-Through Agency: Minnesota Department of Health
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Title 2 U.S. Code of Federal Regulations § 200.318(i) states that the City must maintain records sufficient to detail the history of procurement, and the City must perform a cost or price analysis provided in Title 2 U.S. Code of Federal Regulations § 200.323.
In addition, federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000. Entities must use their documented procurement process compliance.
The City’s procurement policy requires a suspension and debarment clause be included in the contract and also requires the contract manager to verify the vendor is not suspended, debarred, or otherwise excluded at SAM.gov.
Condition: Five of the nine contracts tested exceeded the simplified acquisition threshold which requires a cost or price analysis. The City could not provide documentation that this analysis was performed for four contracts tested. Additionally, a sample of 20 covered transactions was tested for suspension and debarment. In two instances, the City included required suspension and debarment contract clauses but did not maintain documentation of the verification that the vendor was not suspended or debarred at SAM.gov.
Questioned Costs: None.
Context: Nine of 89 contracts were tested for compliance with applicable federal regulations. Additionally, there were 191 covered transactions subject to suspension and debarment.
The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits.
Effect: The City is not in compliance with federal regulations.
Cause: Project/contract managers did not perform or maintain documentation of cost or price analyses. The project/contract managers did not know verification of suspension and debarment using the federal listing was required and, in one instance, relied on the state listing.
Recommendation: We recommend the City review its written policies and procedures and communicate with contract managers their responsibility for complying with the federal regulations and maintaining documentation to support that compliance.
View of Responsible Official: Concur
2023-003 Procurement, Suspension, and Debarrment
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of the Treasury
Program: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds
Award Number and Year: SLT0790, 2021; E-20-MW-27-0003, 2020
Pass-Through Agency: Minnesota Department of Health
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Title 2 U.S. Code of Federal Regulations § 200.318(i) states that the City must maintain records sufficient to detail the history of procurement, and the City must perform a cost or price analysis provided in Title 2 U.S. Code of Federal Regulations § 200.323.
In addition, federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000. Entities must use their documented procurement process compliance.
The City’s procurement policy requires a suspension and debarment clause be included in the contract and also requires the contract manager to verify the vendor is not suspended, debarred, or otherwise excluded at SAM.gov.
Condition: Five of the nine contracts tested exceeded the simplified acquisition threshold which requires a cost or price analysis. The City could not provide documentation that this analysis was performed for four contracts tested. Additionally, a sample of 20 covered transactions was tested for suspension and debarment. In two instances, the City included required suspension and debarment contract clauses but did not maintain documentation of the verification that the vendor was not suspended or debarred at SAM.gov.
Questioned Costs: None.
Context: Nine of 89 contracts were tested for compliance with applicable federal regulations. Additionally, there were 191 covered transactions subject to suspension and debarment.
The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits.
Effect: The City is not in compliance with federal regulations.
Cause: Project/contract managers did not perform or maintain documentation of cost or price analyses. The project/contract managers did not know verification of suspension and debarment using the federal listing was required and, in one instance, relied on the state listing.
Recommendation: We recommend the City review its written policies and procedures and communicate with contract managers their responsibility for complying with the federal regulations and maintaining documentation to support that compliance.
View of Responsible Official: Concur
2023-003 Procurement, Suspension, and Debarrment
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of the Treasury
Program: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds
Award Number and Year: SLT0790, 2021; E-20-MW-27-0003, 2020
Pass-Through Agency: Minnesota Department of Health
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Title 2 U.S. Code of Federal Regulations § 200.318(i) states that the City must maintain records sufficient to detail the history of procurement, and the City must perform a cost or price analysis provided in Title 2 U.S. Code of Federal Regulations § 200.323.
In addition, federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000. Entities must use their documented procurement process compliance.
The City’s procurement policy requires a suspension and debarment clause be included in the contract and also requires the contract manager to verify the vendor is not suspended, debarred, or otherwise excluded at SAM.gov.
Condition: Five of the nine contracts tested exceeded the simplified acquisition threshold which requires a cost or price analysis. The City could not provide documentation that this analysis was performed for four contracts tested. Additionally, a sample of 20 covered transactions was tested for suspension and debarment. In two instances, the City included required suspension and debarment contract clauses but did not maintain documentation of the verification that the vendor was not suspended or debarred at SAM.gov.
Questioned Costs: None.
Context: Nine of 89 contracts were tested for compliance with applicable federal regulations. Additionally, there were 191 covered transactions subject to suspension and debarment.
The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits.
Effect: The City is not in compliance with federal regulations.
Cause: Project/contract managers did not perform or maintain documentation of cost or price analyses. The project/contract managers did not know verification of suspension and debarment using the federal listing was required and, in one instance, relied on the state listing.
Recommendation: We recommend the City review its written policies and procedures and communicate with contract managers their responsibility for complying with the federal regulations and maintaining documentation to support that compliance.
View of Responsible Official: Concur
2023-001 FFATA Reporting
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of Housing and Urban Development
Program: 14.218 Community Development Block Grant
Award Number and Year: B-16-MC-27-0003, 2016; B-17-MC-27-0003, 2017; B-18-MC-27-0003, 2018; B-19-MC-27-0003, 2019; B-20-MC-27-003, 2020; B-20-MW-27-003, 2020; B-21-MC-27-0003, 2021; B-22-MC-27-0003, 2022; B-23-MC-27-0003, 2023
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in Title 2 U.S. Code of Federal Regulations, Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the month following the month in which the obligation was made.
Condition: The City reported subawards related to the 2023 Community Development Block Grant (CDBG) award in an annual report in March 2024 when the documentation was requested for audit.
Questioned Costs: None.
Context: The City has filed annual FFATA reports for CDBG grants years 2020 through 2023, including 2020CV.
Effect: The City is not in compliance with FFATA reporting requirements.
Cause: We were informed the federal awarding agency did not immediately load the City’s 2023 CDBG award into FSRS. City staff initially monitored FSRS on a monthly basis; however, monitoring efforts were not maintained. Upon this information being requested for audit purposes, City staff verified the award had been loaded into FSRS and submitted the report.
Recommendation: We recommend the City implement procedures to ensure reports are submitted as required by FFATA.
View of Responsible Official: Concur
2023-001 FFATA Reporting
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of Housing and Urban Development
Program: 14.218 Community Development Block Grant
Award Number and Year: B-16-MC-27-0003, 2016; B-17-MC-27-0003, 2017; B-18-MC-27-0003, 2018; B-19-MC-27-0003, 2019; B-20-MC-27-003, 2020; B-20-MW-27-003, 2020; B-21-MC-27-0003, 2021; B-22-MC-27-0003, 2022; B-23-MC-27-0003, 2023
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in Title 2 U.S. Code of Federal Regulations, Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the month following the month in which the obligation was made.
Condition: The City reported subawards related to the 2023 Community Development Block Grant (CDBG) award in an annual report in March 2024 when the documentation was requested for audit.
Questioned Costs: None.
Context: The City has filed annual FFATA reports for CDBG grants years 2020 through 2023, including 2020CV.
Effect: The City is not in compliance with FFATA reporting requirements.
Cause: We were informed the federal awarding agency did not immediately load the City’s 2023 CDBG award into FSRS. City staff initially monitored FSRS on a monthly basis; however, monitoring efforts were not maintained. Upon this information being requested for audit purposes, City staff verified the award had been loaded into FSRS and submitted the report.
Recommendation: We recommend the City implement procedures to ensure reports are submitted as required by FFATA.
View of Responsible Official: Concur
2023-002 Suspension and Debarment and Build America, Buy America Act
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of Transportation
Program: 20.205 Highway Planning and Construction
20.205 COVID-19 - Highway Planning and Construction
Award Number and Year: Not provided, 2023
Pass-Through Agency: Minnesota Department of Transportation
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000.
The City’s procurement policy requires a suspension and debarment clause be included in the contract and also requires the contract manager to verify the vendor is not suspended, debarred, or otherwise excluded at SAM.gov.
Additionally, section 70914 of the Build America, Buy America Act (BABA), requires a Buy America preference be included in the terms and conditions of each award with an infrastructure project.
Condition: The contract in one of four projects tested did not include the suspension and debarment clause or the BABA preference. In addition, the City did not verify suspension and debarment before entering into the contract.
Questioned Costs: None.
Context: Four of eight contracts were tested for compliance with applicable federal regulations.
The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits.
Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded may result in the City entering into a transaction with a vendor that is not authorized to provide goods and services. Also, failure to include the BABA requirements in the contract may result in construction materials used in the project not complying with the requirement of the BABA.
Cause: Federal requirements were not followed as the project was initially planned without the use of federal funds.
Recommendation: We recommend the City review its written policies and procedures and communicate with contract managers/administrators their responsibility for complying with the federal regulations and maintaining documentation to support that compliance.
View of Responsible Official: Concur
2023-002 Suspension and Debarment and Build America, Buy America Act
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of Transportation
Program: 20.205 Highway Planning and Construction
20.205 COVID-19 - Highway Planning and Construction
Award Number and Year: Not provided, 2023
Pass-Through Agency: Minnesota Department of Transportation
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000.
The City’s procurement policy requires a suspension and debarment clause be included in the contract and also requires the contract manager to verify the vendor is not suspended, debarred, or otherwise excluded at SAM.gov.
Additionally, section 70914 of the Build America, Buy America Act (BABA), requires a Buy America preference be included in the terms and conditions of each award with an infrastructure project.
Condition: The contract in one of four projects tested did not include the suspension and debarment clause or the BABA preference. In addition, the City did not verify suspension and debarment before entering into the contract.
Questioned Costs: None.
Context: Four of eight contracts were tested for compliance with applicable federal regulations.
The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits.
Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded may result in the City entering into a transaction with a vendor that is not authorized to provide goods and services. Also, failure to include the BABA requirements in the contract may result in construction materials used in the project not complying with the requirement of the BABA.
Cause: Federal requirements were not followed as the project was initially planned without the use of federal funds.
Recommendation: We recommend the City review its written policies and procedures and communicate with contract managers/administrators their responsibility for complying with the federal regulations and maintaining documentation to support that compliance.
View of Responsible Official: Concur
2023-002 Suspension and Debarment and Build America, Buy America Act
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of Transportation
Program: 20.205 Highway Planning and Construction
20.205 COVID-19 - Highway Planning and Construction
Award Number and Year: Not provided, 2023
Pass-Through Agency: Minnesota Department of Transportation
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000.
The City’s procurement policy requires a suspension and debarment clause be included in the contract and also requires the contract manager to verify the vendor is not suspended, debarred, or otherwise excluded at SAM.gov.
Additionally, section 70914 of the Build America, Buy America Act (BABA), requires a Buy America preference be included in the terms and conditions of each award with an infrastructure project.
Condition: The contract in one of four projects tested did not include the suspension and debarment clause or the BABA preference. In addition, the City did not verify suspension and debarment before entering into the contract.
Questioned Costs: None.
Context: Four of eight contracts were tested for compliance with applicable federal regulations.
The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits.
Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded may result in the City entering into a transaction with a vendor that is not authorized to provide goods and services. Also, failure to include the BABA requirements in the contract may result in construction materials used in the project not complying with the requirement of the BABA.
Cause: Federal requirements were not followed as the project was initially planned without the use of federal funds.
Recommendation: We recommend the City review its written policies and procedures and communicate with contract managers/administrators their responsibility for complying with the federal regulations and maintaining documentation to support that compliance.
View of Responsible Official: Concur
2023-003 Procurement, Suspension, and Debarrment
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of the Treasury
Program: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds
Award Number and Year: SLT0790, 2021; E-20-MW-27-0003, 2020
Pass-Through Agency: Minnesota Department of Health
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Title 2 U.S. Code of Federal Regulations § 200.318(i) states that the City must maintain records sufficient to detail the history of procurement, and the City must perform a cost or price analysis provided in Title 2 U.S. Code of Federal Regulations § 200.323.
In addition, federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000. Entities must use their documented procurement process compliance.
The City’s procurement policy requires a suspension and debarment clause be included in the contract and also requires the contract manager to verify the vendor is not suspended, debarred, or otherwise excluded at SAM.gov.
Condition: Five of the nine contracts tested exceeded the simplified acquisition threshold which requires a cost or price analysis. The City could not provide documentation that this analysis was performed for four contracts tested. Additionally, a sample of 20 covered transactions was tested for suspension and debarment. In two instances, the City included required suspension and debarment contract clauses but did not maintain documentation of the verification that the vendor was not suspended or debarred at SAM.gov.
Questioned Costs: None.
Context: Nine of 89 contracts were tested for compliance with applicable federal regulations. Additionally, there were 191 covered transactions subject to suspension and debarment.
The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits.
Effect: The City is not in compliance with federal regulations.
Cause: Project/contract managers did not perform or maintain documentation of cost or price analyses. The project/contract managers did not know verification of suspension and debarment using the federal listing was required and, in one instance, relied on the state listing.
Recommendation: We recommend the City review its written policies and procedures and communicate with contract managers their responsibility for complying with the federal regulations and maintaining documentation to support that compliance.
View of Responsible Official: Concur
2023-003 Procurement, Suspension, and Debarrment
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of the Treasury
Program: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds
Award Number and Year: SLT0790, 2021; E-20-MW-27-0003, 2020
Pass-Through Agency: Minnesota Department of Health
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Title 2 U.S. Code of Federal Regulations § 200.318(i) states that the City must maintain records sufficient to detail the history of procurement, and the City must perform a cost or price analysis provided in Title 2 U.S. Code of Federal Regulations § 200.323.
In addition, federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000. Entities must use their documented procurement process compliance.
The City’s procurement policy requires a suspension and debarment clause be included in the contract and also requires the contract manager to verify the vendor is not suspended, debarred, or otherwise excluded at SAM.gov.
Condition: Five of the nine contracts tested exceeded the simplified acquisition threshold which requires a cost or price analysis. The City could not provide documentation that this analysis was performed for four contracts tested. Additionally, a sample of 20 covered transactions was tested for suspension and debarment. In two instances, the City included required suspension and debarment contract clauses but did not maintain documentation of the verification that the vendor was not suspended or debarred at SAM.gov.
Questioned Costs: None.
Context: Nine of 89 contracts were tested for compliance with applicable federal regulations. Additionally, there were 191 covered transactions subject to suspension and debarment.
The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits.
Effect: The City is not in compliance with federal regulations.
Cause: Project/contract managers did not perform or maintain documentation of cost or price analyses. The project/contract managers did not know verification of suspension and debarment using the federal listing was required and, in one instance, relied on the state listing.
Recommendation: We recommend the City review its written policies and procedures and communicate with contract managers their responsibility for complying with the federal regulations and maintaining documentation to support that compliance.
View of Responsible Official: Concur
2023-003 Procurement, Suspension, and Debarrment
Prior Year Finding Number: N/A
Year of Finding Origination: 2023
Type of Finding: Internal Control Over Compliance and Compliance
Severity of Deficiency: Significant Deficiency and Other Matter
Federal Agency: U.S. Department of the Treasury
Program: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds
Award Number and Year: SLT0790, 2021; E-20-MW-27-0003, 2020
Pass-Through Agency: Minnesota Department of Health
Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Title 2 U.S. Code of Federal Regulations § 200.318(i) states that the City must maintain records sufficient to detail the history of procurement, and the City must perform a cost or price analysis provided in Title 2 U.S. Code of Federal Regulations § 200.323.
In addition, federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000. Entities must use their documented procurement process compliance.
The City’s procurement policy requires a suspension and debarment clause be included in the contract and also requires the contract manager to verify the vendor is not suspended, debarred, or otherwise excluded at SAM.gov.
Condition: Five of the nine contracts tested exceeded the simplified acquisition threshold which requires a cost or price analysis. The City could not provide documentation that this analysis was performed for four contracts tested. Additionally, a sample of 20 covered transactions was tested for suspension and debarment. In two instances, the City included required suspension and debarment contract clauses but did not maintain documentation of the verification that the vendor was not suspended or debarred at SAM.gov.
Questioned Costs: None.
Context: Nine of 89 contracts were tested for compliance with applicable federal regulations. Additionally, there were 191 covered transactions subject to suspension and debarment.
The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits.
Effect: The City is not in compliance with federal regulations.
Cause: Project/contract managers did not perform or maintain documentation of cost or price analyses. The project/contract managers did not know verification of suspension and debarment using the federal listing was required and, in one instance, relied on the state listing.
Recommendation: We recommend the City review its written policies and procedures and communicate with contract managers their responsibility for complying with the federal regulations and maintaining documentation to support that compliance.
View of Responsible Official: Concur