Audit 321779

Federal Agency: U.S. Department of the Treasury Federal Program Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Assistance Listing Number: 21.027 Name of Pass-through Entity: New Jersey Department of State Business Action Center Criteria: In accordance with 2 CFR section 200.213 and 180.300, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management ("SAM") Exclusions maintained by the General Services Administration ("GSA") and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our testing, we noted that CNJ did not provide adequate supporting documentation demonstrating that proper suspension and debarment checks were performed. Cause: CNJ did not have adequate policies, procedures, and controls in place to ensure compliance with suspension and debarment requirements. Effect or Potential Effect: Failure to timely verify that a vendor is not suspended or debarred could result in entering into a contract with an entity that is barred from performing work for the U.S. government. Questioned Costs: None Context: For 3 procurement samples out of a total of 3 tested, management did not provide adequate supporting documentation for the suspension and debarment check. However, subsequent verification revealed that none of the vendors selected were suspended or debarred. Identification as a Repeat Finding: This finding is not a repeat finding. Recommendation: We recommend that CNJ establish written procurement policies and procedures, including checks for suspension and debarment, to ensure that CNJ is in compliance with the Uniform Guidance and that all staff are trained on this policy to ensure compliance and related internal controls over compliance are operating effectively.   Responsible Official's Response: Choose New Jersey ("CNJ") understands the findings outlined in the audit report. CNJ has updated its procurement procedures for the federal grant to align with 2 CFR section 200.213 and 2 CFR section 180.300. To ensure that vendors supporting efforts on the federal grant are not suspended or debarred from doing business with the federal government, CNJ has added a task in our Procurement Summary (procurement checklist) that specifically requires the project manager and Chief Administrative Officer ("CAO") to verify the vendor’s eligibility in the System for Award Management ("SAM") maintained by the General Services Administration ("GSA") (available at SAM.gov). In addition to the verification that the vendor is not prohibited (debarred or suspended) from providing services to or contracting with the United States government, CNJ will retain a copy of the verification for the procurement file. This action will be completed during the vendor evaluation stage of the procurement and before contract is awarded to the vendor. It should be noted that the vendors selected for testing for 2023 were found to be in good standing. Corrective action incorporation has already begun and will be fully implemented by 10/15/2024.

Federal Agency: U.S. Department of the Treasury Federal Program Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Assistance Listing Number: 21.027 Name of Pass-through Entity: New Jersey Department of State Business Action Center Criteria: In accordance with 2 CFR section 200.213 and 180.300, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management ("SAM") Exclusions maintained by the General Services Administration ("GSA") and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our testing, we noted that CNJ did not provide adequate supporting documentation demonstrating that proper suspension and debarment checks were performed. Cause: CNJ did not have adequate policies, procedures, and controls in place to ensure compliance with suspension and debarment requirements. Effect or Potential Effect: Failure to timely verify that a vendor is not suspended or debarred could result in entering into a contract with an entity that is barred from performing work for the U.S. government. Questioned Costs: None Context: For 3 procurement samples out of a total of 3 tested, management did not provide adequate supporting documentation for the suspension and debarment check. However, subsequent verification revealed that none of the vendors selected were suspended or debarred. Identification as a Repeat Finding: This finding is not a repeat finding. Recommendation: We recommend that CNJ establish written procurement policies and procedures, including checks for suspension and debarment, to ensure that CNJ is in compliance with the Uniform Guidance and that all staff are trained on this policy to ensure compliance and related internal controls over compliance are operating effectively.   Responsible Official's Response: Choose New Jersey ("CNJ") understands the findings outlined in the audit report. CNJ has updated its procurement procedures for the federal grant to align with 2 CFR section 200.213 and 2 CFR section 180.300. To ensure that vendors supporting efforts on the federal grant are not suspended or debarred from doing business with the federal government, CNJ has added a task in our Procurement Summary (procurement checklist) that specifically requires the project manager and Chief Administrative Officer ("CAO") to verify the vendor’s eligibility in the System for Award Management ("SAM") maintained by the General Services Administration ("GSA") (available at SAM.gov). In addition to the verification that the vendor is not prohibited (debarred or suspended) from providing services to or contracting with the United States government, CNJ will retain a copy of the verification for the procurement file. This action will be completed during the vendor evaluation stage of the procurement and before contract is awarded to the vendor. It should be noted that the vendors selected for testing for 2023 were found to be in good standing. Corrective action incorporation has already begun and will be fully implemented by 10/15/2024.