2023-001 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 Treasury
Federal Award/Contract Number: N/A
Pass-through Entity Name: Washington State Department of Commerce
Pass-through Award/Contract Number: CLH31018, S21-96401-016, 22-96810-006
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 2023, the County spent $3,252,450 in program funds to respond to the public health emergency and address the negative economic impacts the emergency caused.
Federal regulations require recipients to establish and maintain 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 are not suspended, debarred or otherwise excluded from participating in federal programs. The County may verify this 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 verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement.
Description of Condition
Our audit found the County did not have adequate controls to verify two of six contractors it paid more than $25,000 in federal funds were not suspended or debarred from participating in federal programs.
We consider this deficiency in internal controls to be a material weakness that led to material noncompliance.
Cause of Condition
County staff were aware of the requirement to verify the suspension and debarment status for contractors but did not follow the established process to check the SAM.gov website to verify the status of the two contractors and did not retain documentation to demonstrate compliance with the requirement.
Effect of Condition
The County did not obtain a written certification from the contractor, insert a clause into the contract or check for exclusion records at SAM.gov to verify two contractors it paid $250,480 using federal funds were not suspended or debarred before contracting with them. Without adequate internal controls, the County cannot ensure the contractors it paid with federal funds were eligible to participate in federal programs. Any program funds the County used to pay contractors that were suspended or debarred would be unallowable, and the awarding agency could potentially recover them. Because we subsequently verified the contractors were not suspended or debarred, we are not questioning costs.
Recommendation
We recommend the County strengthen internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before contracting with or purchasing from them.
County’s Response
The County is committed to ensuring internal controls are adequate for compliance with federal suspension and debarment requirements. Management understands the seriousness of potentially awarding federal funds to ineligible parties and has taken steps to confirm that compliance is followed in future purchases using federal funds.
Lincoln County (LC) Public Works staff verified the suspension and debarment status for both suppliers, but unfortunately did not print physical copies to place in the file. All future LC Federally Funded projects that involve subcontractors and material suppliers getting paid an excess of $25,000 shall require the verification and proper documentation retention to maintain proper internal controls and remain in compliance with all requirements.
The County will increase internal controls by adding a clause or condition into the ARPA/SLFRF contract that states the vendor is not suspended or debarred and will check for exclusion records at SAM.gov. If the internal control is a check for exclusion records at SAM.gov, a copy of the SAM.gov exclusion will be kept in the ARPA/SLFRF Project file for each vendor.
Auditor’s Remarks
We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue 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.
2023-001 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 Treasury
Federal Award/Contract Number: N/A
Pass-through Entity Name: Washington State Department of Commerce
Pass-through Award/Contract Number: CLH31018, S21-96401-016, 22-96810-006
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 2023, the County spent $3,252,450 in program funds to respond to the public health emergency and address the negative economic impacts the emergency caused.
Federal regulations require recipients to establish and maintain 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 are not suspended, debarred or otherwise excluded from participating in federal programs. The County may verify this 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 verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement.
Description of Condition
Our audit found the County did not have adequate controls to verify two of six contractors it paid more than $25,000 in federal funds were not suspended or debarred from participating in federal programs.
We consider this deficiency in internal controls to be a material weakness that led to material noncompliance.
Cause of Condition
County staff were aware of the requirement to verify the suspension and debarment status for contractors but did not follow the established process to check the SAM.gov website to verify the status of the two contractors and did not retain documentation to demonstrate compliance with the requirement.
Effect of Condition
The County did not obtain a written certification from the contractor, insert a clause into the contract or check for exclusion records at SAM.gov to verify two contractors it paid $250,480 using federal funds were not suspended or debarred before contracting with them. Without adequate internal controls, the County cannot ensure the contractors it paid with federal funds were eligible to participate in federal programs. Any program funds the County used to pay contractors that were suspended or debarred would be unallowable, and the awarding agency could potentially recover them. Because we subsequently verified the contractors were not suspended or debarred, we are not questioning costs.
Recommendation
We recommend the County strengthen internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before contracting with or purchasing from them.
County’s Response
The County is committed to ensuring internal controls are adequate for compliance with federal suspension and debarment requirements. Management understands the seriousness of potentially awarding federal funds to ineligible parties and has taken steps to confirm that compliance is followed in future purchases using federal funds.
Lincoln County (LC) Public Works staff verified the suspension and debarment status for both suppliers, but unfortunately did not print physical copies to place in the file. All future LC Federally Funded projects that involve subcontractors and material suppliers getting paid an excess of $25,000 shall require the verification and proper documentation retention to maintain proper internal controls and remain in compliance with all requirements.
The County will increase internal controls by adding a clause or condition into the ARPA/SLFRF contract that states the vendor is not suspended or debarred and will check for exclusion records at SAM.gov. If the internal control is a check for exclusion records at SAM.gov, a copy of the SAM.gov exclusion will be kept in the ARPA/SLFRF Project file for each vendor.
Auditor’s Remarks
We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue 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.
2023-001 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 Treasury
Federal Award/Contract Number: N/A
Pass-through Entity Name: Washington State Department of Commerce
Pass-through Award/Contract Number: CLH31018, S21-96401-016, 22-96810-006
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 2023, the County spent $3,252,450 in program funds to respond to the public health emergency and address the negative economic impacts the emergency caused.
Federal regulations require recipients to establish and maintain 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 are not suspended, debarred or otherwise excluded from participating in federal programs. The County may verify this 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 verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement.
Description of Condition
Our audit found the County did not have adequate controls to verify two of six contractors it paid more than $25,000 in federal funds were not suspended or debarred from participating in federal programs.
We consider this deficiency in internal controls to be a material weakness that led to material noncompliance.
Cause of Condition
County staff were aware of the requirement to verify the suspension and debarment status for contractors but did not follow the established process to check the SAM.gov website to verify the status of the two contractors and did not retain documentation to demonstrate compliance with the requirement.
Effect of Condition
The County did not obtain a written certification from the contractor, insert a clause into the contract or check for exclusion records at SAM.gov to verify two contractors it paid $250,480 using federal funds were not suspended or debarred before contracting with them. Without adequate internal controls, the County cannot ensure the contractors it paid with federal funds were eligible to participate in federal programs. Any program funds the County used to pay contractors that were suspended or debarred would be unallowable, and the awarding agency could potentially recover them. Because we subsequently verified the contractors were not suspended or debarred, we are not questioning costs.
Recommendation
We recommend the County strengthen internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before contracting with or purchasing from them.
County’s Response
The County is committed to ensuring internal controls are adequate for compliance with federal suspension and debarment requirements. Management understands the seriousness of potentially awarding federal funds to ineligible parties and has taken steps to confirm that compliance is followed in future purchases using federal funds.
Lincoln County (LC) Public Works staff verified the suspension and debarment status for both suppliers, but unfortunately did not print physical copies to place in the file. All future LC Federally Funded projects that involve subcontractors and material suppliers getting paid an excess of $25,000 shall require the verification and proper documentation retention to maintain proper internal controls and remain in compliance with all requirements.
The County will increase internal controls by adding a clause or condition into the ARPA/SLFRF contract that states the vendor is not suspended or debarred and will check for exclusion records at SAM.gov. If the internal control is a check for exclusion records at SAM.gov, a copy of the SAM.gov exclusion will be kept in the ARPA/SLFRF Project file for each vendor.
Auditor’s Remarks
We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue 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.
2023-001 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 Treasury
Federal Award/Contract Number: N/A
Pass-through Entity Name: Washington State Department of Commerce
Pass-through Award/Contract Number: CLH31018, S21-96401-016, 22-96810-006
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 2023, the County spent $3,252,450 in program funds to respond to the public health emergency and address the negative economic impacts the emergency caused.
Federal regulations require recipients to establish and maintain 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 are not suspended, debarred or otherwise excluded from participating in federal programs. The County may verify this 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 verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement.
Description of Condition
Our audit found the County did not have adequate controls to verify two of six contractors it paid more than $25,000 in federal funds were not suspended or debarred from participating in federal programs.
We consider this deficiency in internal controls to be a material weakness that led to material noncompliance.
Cause of Condition
County staff were aware of the requirement to verify the suspension and debarment status for contractors but did not follow the established process to check the SAM.gov website to verify the status of the two contractors and did not retain documentation to demonstrate compliance with the requirement.
Effect of Condition
The County did not obtain a written certification from the contractor, insert a clause into the contract or check for exclusion records at SAM.gov to verify two contractors it paid $250,480 using federal funds were not suspended or debarred before contracting with them. Without adequate internal controls, the County cannot ensure the contractors it paid with federal funds were eligible to participate in federal programs. Any program funds the County used to pay contractors that were suspended or debarred would be unallowable, and the awarding agency could potentially recover them. Because we subsequently verified the contractors were not suspended or debarred, we are not questioning costs.
Recommendation
We recommend the County strengthen internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before contracting with or purchasing from them.
County’s Response
The County is committed to ensuring internal controls are adequate for compliance with federal suspension and debarment requirements. Management understands the seriousness of potentially awarding federal funds to ineligible parties and has taken steps to confirm that compliance is followed in future purchases using federal funds.
Lincoln County (LC) Public Works staff verified the suspension and debarment status for both suppliers, but unfortunately did not print physical copies to place in the file. All future LC Federally Funded projects that involve subcontractors and material suppliers getting paid an excess of $25,000 shall require the verification and proper documentation retention to maintain proper internal controls and remain in compliance with all requirements.
The County will increase internal controls by adding a clause or condition into the ARPA/SLFRF contract that states the vendor is not suspended or debarred and will check for exclusion records at SAM.gov. If the internal control is a check for exclusion records at SAM.gov, a copy of the SAM.gov exclusion will be kept in the ARPA/SLFRF Project file for each vendor.
Auditor’s Remarks
We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue 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.
2023-001 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 Treasury
Federal Award/Contract Number: N/A
Pass-through Entity Name: Washington State Department of Commerce
Pass-through Award/Contract Number: CLH31018, S21-96401-016, 22-96810-006
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 2023, the County spent $3,252,450 in program funds to respond to the public health emergency and address the negative economic impacts the emergency caused.
Federal regulations require recipients to establish and maintain 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 are not suspended, debarred or otherwise excluded from participating in federal programs. The County may verify this 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 verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement.
Description of Condition
Our audit found the County did not have adequate controls to verify two of six contractors it paid more than $25,000 in federal funds were not suspended or debarred from participating in federal programs.
We consider this deficiency in internal controls to be a material weakness that led to material noncompliance.
Cause of Condition
County staff were aware of the requirement to verify the suspension and debarment status for contractors but did not follow the established process to check the SAM.gov website to verify the status of the two contractors and did not retain documentation to demonstrate compliance with the requirement.
Effect of Condition
The County did not obtain a written certification from the contractor, insert a clause into the contract or check for exclusion records at SAM.gov to verify two contractors it paid $250,480 using federal funds were not suspended or debarred before contracting with them. Without adequate internal controls, the County cannot ensure the contractors it paid with federal funds were eligible to participate in federal programs. Any program funds the County used to pay contractors that were suspended or debarred would be unallowable, and the awarding agency could potentially recover them. Because we subsequently verified the contractors were not suspended or debarred, we are not questioning costs.
Recommendation
We recommend the County strengthen internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before contracting with or purchasing from them.
County’s Response
The County is committed to ensuring internal controls are adequate for compliance with federal suspension and debarment requirements. Management understands the seriousness of potentially awarding federal funds to ineligible parties and has taken steps to confirm that compliance is followed in future purchases using federal funds.
Lincoln County (LC) Public Works staff verified the suspension and debarment status for both suppliers, but unfortunately did not print physical copies to place in the file. All future LC Federally Funded projects that involve subcontractors and material suppliers getting paid an excess of $25,000 shall require the verification and proper documentation retention to maintain proper internal controls and remain in compliance with all requirements.
The County will increase internal controls by adding a clause or condition into the ARPA/SLFRF contract that states the vendor is not suspended or debarred and will check for exclusion records at SAM.gov. If the internal control is a check for exclusion records at SAM.gov, a copy of the SAM.gov exclusion will be kept in the ARPA/SLFRF Project file for each vendor.
Auditor’s Remarks
We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue 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.
2023-001 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 Treasury
Federal Award/Contract Number: N/A
Pass-through Entity Name: Washington State Department of Commerce
Pass-through Award/Contract Number: CLH31018, S21-96401-016, 22-96810-006
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 2023, the County spent $3,252,450 in program funds to respond to the public health emergency and address the negative economic impacts the emergency caused.
Federal regulations require recipients to establish and maintain 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 are not suspended, debarred or otherwise excluded from participating in federal programs. The County may verify this 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 verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement.
Description of Condition
Our audit found the County did not have adequate controls to verify two of six contractors it paid more than $25,000 in federal funds were not suspended or debarred from participating in federal programs.
We consider this deficiency in internal controls to be a material weakness that led to material noncompliance.
Cause of Condition
County staff were aware of the requirement to verify the suspension and debarment status for contractors but did not follow the established process to check the SAM.gov website to verify the status of the two contractors and did not retain documentation to demonstrate compliance with the requirement.
Effect of Condition
The County did not obtain a written certification from the contractor, insert a clause into the contract or check for exclusion records at SAM.gov to verify two contractors it paid $250,480 using federal funds were not suspended or debarred before contracting with them. Without adequate internal controls, the County cannot ensure the contractors it paid with federal funds were eligible to participate in federal programs. Any program funds the County used to pay contractors that were suspended or debarred would be unallowable, and the awarding agency could potentially recover them. Because we subsequently verified the contractors were not suspended or debarred, we are not questioning costs.
Recommendation
We recommend the County strengthen internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before contracting with or purchasing from them.
County’s Response
The County is committed to ensuring internal controls are adequate for compliance with federal suspension and debarment requirements. Management understands the seriousness of potentially awarding federal funds to ineligible parties and has taken steps to confirm that compliance is followed in future purchases using federal funds.
Lincoln County (LC) Public Works staff verified the suspension and debarment status for both suppliers, but unfortunately did not print physical copies to place in the file. All future LC Federally Funded projects that involve subcontractors and material suppliers getting paid an excess of $25,000 shall require the verification and proper documentation retention to maintain proper internal controls and remain in compliance with all requirements.
The County will increase internal controls by adding a clause or condition into the ARPA/SLFRF contract that states the vendor is not suspended or debarred and will check for exclusion records at SAM.gov. If the internal control is a check for exclusion records at SAM.gov, a copy of the SAM.gov exclusion will be kept in the ARPA/SLFRF Project file for each vendor.
Auditor’s Remarks
We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue 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.
2023-001 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 Treasury
Federal Award/Contract Number: N/A
Pass-through Entity Name: Washington State Department of Commerce
Pass-through Award/Contract Number: CLH31018, S21-96401-016, 22-96810-006
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 2023, the County spent $3,252,450 in program funds to respond to the public health emergency and address the negative economic impacts the emergency caused.
Federal regulations require recipients to establish and maintain 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 are not suspended, debarred or otherwise excluded from participating in federal programs. The County may verify this 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 verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement.
Description of Condition
Our audit found the County did not have adequate controls to verify two of six contractors it paid more than $25,000 in federal funds were not suspended or debarred from participating in federal programs.
We consider this deficiency in internal controls to be a material weakness that led to material noncompliance.
Cause of Condition
County staff were aware of the requirement to verify the suspension and debarment status for contractors but did not follow the established process to check the SAM.gov website to verify the status of the two contractors and did not retain documentation to demonstrate compliance with the requirement.
Effect of Condition
The County did not obtain a written certification from the contractor, insert a clause into the contract or check for exclusion records at SAM.gov to verify two contractors it paid $250,480 using federal funds were not suspended or debarred before contracting with them. Without adequate internal controls, the County cannot ensure the contractors it paid with federal funds were eligible to participate in federal programs. Any program funds the County used to pay contractors that were suspended or debarred would be unallowable, and the awarding agency could potentially recover them. Because we subsequently verified the contractors were not suspended or debarred, we are not questioning costs.
Recommendation
We recommend the County strengthen internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before contracting with or purchasing from them.
County’s Response
The County is committed to ensuring internal controls are adequate for compliance with federal suspension and debarment requirements. Management understands the seriousness of potentially awarding federal funds to ineligible parties and has taken steps to confirm that compliance is followed in future purchases using federal funds.
Lincoln County (LC) Public Works staff verified the suspension and debarment status for both suppliers, but unfortunately did not print physical copies to place in the file. All future LC Federally Funded projects that involve subcontractors and material suppliers getting paid an excess of $25,000 shall require the verification and proper documentation retention to maintain proper internal controls and remain in compliance with all requirements.
The County will increase internal controls by adding a clause or condition into the ARPA/SLFRF contract that states the vendor is not suspended or debarred and will check for exclusion records at SAM.gov. If the internal control is a check for exclusion records at SAM.gov, a copy of the SAM.gov exclusion will be kept in the ARPA/SLFRF Project file for each vendor.
Auditor’s Remarks
We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue 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.
2023-001 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 Treasury
Federal Award/Contract Number: N/A
Pass-through Entity Name: Washington State Department of Commerce
Pass-through Award/Contract Number: CLH31018, S21-96401-016, 22-96810-006
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 2023, the County spent $3,252,450 in program funds to respond to the public health emergency and address the negative economic impacts the emergency caused.
Federal regulations require recipients to establish and maintain 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 are not suspended, debarred or otherwise excluded from participating in federal programs. The County may verify this 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 verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement.
Description of Condition
Our audit found the County did not have adequate controls to verify two of six contractors it paid more than $25,000 in federal funds were not suspended or debarred from participating in federal programs.
We consider this deficiency in internal controls to be a material weakness that led to material noncompliance.
Cause of Condition
County staff were aware of the requirement to verify the suspension and debarment status for contractors but did not follow the established process to check the SAM.gov website to verify the status of the two contractors and did not retain documentation to demonstrate compliance with the requirement.
Effect of Condition
The County did not obtain a written certification from the contractor, insert a clause into the contract or check for exclusion records at SAM.gov to verify two contractors it paid $250,480 using federal funds were not suspended or debarred before contracting with them. Without adequate internal controls, the County cannot ensure the contractors it paid with federal funds were eligible to participate in federal programs. Any program funds the County used to pay contractors that were suspended or debarred would be unallowable, and the awarding agency could potentially recover them. Because we subsequently verified the contractors were not suspended or debarred, we are not questioning costs.
Recommendation
We recommend the County strengthen internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before contracting with or purchasing from them.
County’s Response
The County is committed to ensuring internal controls are adequate for compliance with federal suspension and debarment requirements. Management understands the seriousness of potentially awarding federal funds to ineligible parties and has taken steps to confirm that compliance is followed in future purchases using federal funds.
Lincoln County (LC) Public Works staff verified the suspension and debarment status for both suppliers, but unfortunately did not print physical copies to place in the file. All future LC Federally Funded projects that involve subcontractors and material suppliers getting paid an excess of $25,000 shall require the verification and proper documentation retention to maintain proper internal controls and remain in compliance with all requirements.
The County will increase internal controls by adding a clause or condition into the ARPA/SLFRF contract that states the vendor is not suspended or debarred and will check for exclusion records at SAM.gov. If the internal control is a check for exclusion records at SAM.gov, a copy of the SAM.gov exclusion will be kept in the ARPA/SLFRF Project file for each vendor.
Auditor’s Remarks
We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue 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.
2023-001 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 Treasury
Federal Award/Contract Number: N/A
Pass-through Entity Name: Washington State Department of Commerce
Pass-through Award/Contract Number: CLH31018, S21-96401-016, 22-96810-006
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 2023, the County spent $3,252,450 in program funds to respond to the public health emergency and address the negative economic impacts the emergency caused.
Federal regulations require recipients to establish and maintain 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 are not suspended, debarred or otherwise excluded from participating in federal programs. The County may verify this 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 verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement.
Description of Condition
Our audit found the County did not have adequate controls to verify two of six contractors it paid more than $25,000 in federal funds were not suspended or debarred from participating in federal programs.
We consider this deficiency in internal controls to be a material weakness that led to material noncompliance.
Cause of Condition
County staff were aware of the requirement to verify the suspension and debarment status for contractors but did not follow the established process to check the SAM.gov website to verify the status of the two contractors and did not retain documentation to demonstrate compliance with the requirement.
Effect of Condition
The County did not obtain a written certification from the contractor, insert a clause into the contract or check for exclusion records at SAM.gov to verify two contractors it paid $250,480 using federal funds were not suspended or debarred before contracting with them. Without adequate internal controls, the County cannot ensure the contractors it paid with federal funds were eligible to participate in federal programs. Any program funds the County used to pay contractors that were suspended or debarred would be unallowable, and the awarding agency could potentially recover them. Because we subsequently verified the contractors were not suspended or debarred, we are not questioning costs.
Recommendation
We recommend the County strengthen internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before contracting with or purchasing from them.
County’s Response
The County is committed to ensuring internal controls are adequate for compliance with federal suspension and debarment requirements. Management understands the seriousness of potentially awarding federal funds to ineligible parties and has taken steps to confirm that compliance is followed in future purchases using federal funds.
Lincoln County (LC) Public Works staff verified the suspension and debarment status for both suppliers, but unfortunately did not print physical copies to place in the file. All future LC Federally Funded projects that involve subcontractors and material suppliers getting paid an excess of $25,000 shall require the verification and proper documentation retention to maintain proper internal controls and remain in compliance with all requirements.
The County will increase internal controls by adding a clause or condition into the ARPA/SLFRF contract that states the vendor is not suspended or debarred and will check for exclusion records at SAM.gov. If the internal control is a check for exclusion records at SAM.gov, a copy of the SAM.gov exclusion will be kept in the ARPA/SLFRF Project file for each vendor.
Auditor’s Remarks
We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue 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.
2023-001 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 Treasury
Federal Award/Contract Number: N/A
Pass-through Entity Name: Washington State Department of Commerce
Pass-through Award/Contract Number: CLH31018, S21-96401-016, 22-96810-006
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 2023, the County spent $3,252,450 in program funds to respond to the public health emergency and address the negative economic impacts the emergency caused.
Federal regulations require recipients to establish and maintain 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 are not suspended, debarred or otherwise excluded from participating in federal programs. The County may verify this 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 verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement.
Description of Condition
Our audit found the County did not have adequate controls to verify two of six contractors it paid more than $25,000 in federal funds were not suspended or debarred from participating in federal programs.
We consider this deficiency in internal controls to be a material weakness that led to material noncompliance.
Cause of Condition
County staff were aware of the requirement to verify the suspension and debarment status for contractors but did not follow the established process to check the SAM.gov website to verify the status of the two contractors and did not retain documentation to demonstrate compliance with the requirement.
Effect of Condition
The County did not obtain a written certification from the contractor, insert a clause into the contract or check for exclusion records at SAM.gov to verify two contractors it paid $250,480 using federal funds were not suspended or debarred before contracting with them. Without adequate internal controls, the County cannot ensure the contractors it paid with federal funds were eligible to participate in federal programs. Any program funds the County used to pay contractors that were suspended or debarred would be unallowable, and the awarding agency could potentially recover them. Because we subsequently verified the contractors were not suspended or debarred, we are not questioning costs.
Recommendation
We recommend the County strengthen internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before contracting with or purchasing from them.
County’s Response
The County is committed to ensuring internal controls are adequate for compliance with federal suspension and debarment requirements. Management understands the seriousness of potentially awarding federal funds to ineligible parties and has taken steps to confirm that compliance is followed in future purchases using federal funds.
Lincoln County (LC) Public Works staff verified the suspension and debarment status for both suppliers, but unfortunately did not print physical copies to place in the file. All future LC Federally Funded projects that involve subcontractors and material suppliers getting paid an excess of $25,000 shall require the verification and proper documentation retention to maintain proper internal controls and remain in compliance with all requirements.
The County will increase internal controls by adding a clause or condition into the ARPA/SLFRF contract that states the vendor is not suspended or debarred and will check for exclusion records at SAM.gov. If the internal control is a check for exclusion records at SAM.gov, a copy of the SAM.gov exclusion will be kept in the ARPA/SLFRF Project file for each vendor.
Auditor’s Remarks
We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue 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.
2023-001 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 Treasury
Federal Award/Contract Number: N/A
Pass-through Entity Name: Washington State Department of Commerce
Pass-through Award/Contract Number: CLH31018, S21-96401-016, 22-96810-006
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 2023, the County spent $3,252,450 in program funds to respond to the public health emergency and address the negative economic impacts the emergency caused.
Federal regulations require recipients to establish and maintain 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 are not suspended, debarred or otherwise excluded from participating in federal programs. The County may verify this 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 verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement.
Description of Condition
Our audit found the County did not have adequate controls to verify two of six contractors it paid more than $25,000 in federal funds were not suspended or debarred from participating in federal programs.
We consider this deficiency in internal controls to be a material weakness that led to material noncompliance.
Cause of Condition
County staff were aware of the requirement to verify the suspension and debarment status for contractors but did not follow the established process to check the SAM.gov website to verify the status of the two contractors and did not retain documentation to demonstrate compliance with the requirement.
Effect of Condition
The County did not obtain a written certification from the contractor, insert a clause into the contract or check for exclusion records at SAM.gov to verify two contractors it paid $250,480 using federal funds were not suspended or debarred before contracting with them. Without adequate internal controls, the County cannot ensure the contractors it paid with federal funds were eligible to participate in federal programs. Any program funds the County used to pay contractors that were suspended or debarred would be unallowable, and the awarding agency could potentially recover them. Because we subsequently verified the contractors were not suspended or debarred, we are not questioning costs.
Recommendation
We recommend the County strengthen internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before contracting with or purchasing from them.
County’s Response
The County is committed to ensuring internal controls are adequate for compliance with federal suspension and debarment requirements. Management understands the seriousness of potentially awarding federal funds to ineligible parties and has taken steps to confirm that compliance is followed in future purchases using federal funds.
Lincoln County (LC) Public Works staff verified the suspension and debarment status for both suppliers, but unfortunately did not print physical copies to place in the file. All future LC Federally Funded projects that involve subcontractors and material suppliers getting paid an excess of $25,000 shall require the verification and proper documentation retention to maintain proper internal controls and remain in compliance with all requirements.
The County will increase internal controls by adding a clause or condition into the ARPA/SLFRF contract that states the vendor is not suspended or debarred and will check for exclusion records at SAM.gov. If the internal control is a check for exclusion records at SAM.gov, a copy of the SAM.gov exclusion will be kept in the ARPA/SLFRF Project file for each vendor.
Auditor’s Remarks
We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue 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.
2023-001 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 Treasury
Federal Award/Contract Number: N/A
Pass-through Entity Name: Washington State Department of Commerce
Pass-through Award/Contract Number: CLH31018, S21-96401-016, 22-96810-006
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 2023, the County spent $3,252,450 in program funds to respond to the public health emergency and address the negative economic impacts the emergency caused.
Federal regulations require recipients to establish and maintain 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 are not suspended, debarred or otherwise excluded from participating in federal programs. The County may verify this 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 verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement.
Description of Condition
Our audit found the County did not have adequate controls to verify two of six contractors it paid more than $25,000 in federal funds were not suspended or debarred from participating in federal programs.
We consider this deficiency in internal controls to be a material weakness that led to material noncompliance.
Cause of Condition
County staff were aware of the requirement to verify the suspension and debarment status for contractors but did not follow the established process to check the SAM.gov website to verify the status of the two contractors and did not retain documentation to demonstrate compliance with the requirement.
Effect of Condition
The County did not obtain a written certification from the contractor, insert a clause into the contract or check for exclusion records at SAM.gov to verify two contractors it paid $250,480 using federal funds were not suspended or debarred before contracting with them. Without adequate internal controls, the County cannot ensure the contractors it paid with federal funds were eligible to participate in federal programs. Any program funds the County used to pay contractors that were suspended or debarred would be unallowable, and the awarding agency could potentially recover them. Because we subsequently verified the contractors were not suspended or debarred, we are not questioning costs.
Recommendation
We recommend the County strengthen internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before contracting with or purchasing from them.
County’s Response
The County is committed to ensuring internal controls are adequate for compliance with federal suspension and debarment requirements. Management understands the seriousness of potentially awarding federal funds to ineligible parties and has taken steps to confirm that compliance is followed in future purchases using federal funds.
Lincoln County (LC) Public Works staff verified the suspension and debarment status for both suppliers, but unfortunately did not print physical copies to place in the file. All future LC Federally Funded projects that involve subcontractors and material suppliers getting paid an excess of $25,000 shall require the verification and proper documentation retention to maintain proper internal controls and remain in compliance with all requirements.
The County will increase internal controls by adding a clause or condition into the ARPA/SLFRF contract that states the vendor is not suspended or debarred and will check for exclusion records at SAM.gov. If the internal control is a check for exclusion records at SAM.gov, a copy of the SAM.gov exclusion will be kept in the ARPA/SLFRF Project file for each vendor.
Auditor’s Remarks
We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue 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.