Audit 32429

Finding 2022-002 Procurement and Suspension and Disbarment - Noncompliance and Significant Deficiency in Internal Controls Over Compliance Agency U.S. Environmental Protection Agency ALN 66.202 Program Name Sanitation Facilities Improvements Congressionally Mandated Projects Award Year FY 2018 Pass-Through Agency Alaska Native Tribal Health Consortium Pass-Through Entity Identifying Number(s) AN18-RO2 Criteria In accordance with 2 CFR 200, the City?s procurement policy must conform to the Uniform Guidance standards. This requires the City to establish a policy for small purchase procedures that covers transactions that exceed micropurchase amount ($10,000) but do not exceed the simplified acquisition threshold ($250,000). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. Condition The City executed several small purchase transactions without obtaining price or rate quotations from an adequate number of qualified sources. Cause The City did not establish a policy for small purchase to satisfy the requirements of 2 CFR 200 of Uniform Guidance. Effect or potential effect The City was not in compliance with the procurement requirement for the program. Questioned costs $156,025 Context In our testwork for procurement requirements, we noted that 2 of the 4 samples selected did not have the documentation that conformed with the Uniform Guidance procurement requirements. Identification as a repeat finding No Recommendation We recommend that the City establish a policy in regard to small purchase procedures and ensure the management is following its procurement policy and meeting the Uniform Guidance compliance requirements. Views of responsible officials Management agrees with the finding. The City is implementing new policy covering the Uniform Guidance thresholds that are established for federal programs.

Finding 2022-003 Procurement and Suspension and Disbarment - Noncompliance and Significant Deficiency in Internal Controls Over Compliance Agency U.S. Environmental Protection Agency ALN 66.202 Program Name Sanitation Facilities Improvements Congressionally Mandated Projects Award Year FY 2018 Through Agency Alaska Native Tribal Health Consortium Pass-Through Entity Identifying Number(s) AN18-RO2 Criteria Internal control policies should be established to provide reasonable assurance that an entity with which the City plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded for covered transactions under Uniform Guidance. Condition Documentation that vendors are not debarred, suspended or otherwise excluded were not retained in the City?s procurement files and thus, auditors were not able to test that the relevant internal controls were operating effectively. Cause The procurement procedures for the City did not require retention of the verification for documentation purposes, and none was evident in the file. Effect or potential effect Lack of documentation might make it harder for the City?s management to monitor compliance with the requirement. Questioned costs None noted Context Auditors were not able to verify internal controls over sampled procurements, since no documentation was retained. Identification as a repeat finding No Recommendation We recommend that management retain evidence of review that prospective vendors and suppliers are not on the suspension and debarment list for covered transactions under Uniform Guidance. Views of responsible officials Management concurs with the finding. Management is updating the internal procurement policies, procedures, and award checklists to ensure that evidence of the search, and results of the search, for suspension and debarment is being completed and filed prior to the award of any procurement activities.

Finding 2022-002 Procurement and Suspension and Disbarment - Noncompliance and Significant Deficiency in Internal Controls Over Compliance Agency U.S. Environmental Protection Agency ALN 66.202 Program Name Sanitation Facilities Improvements Congressionally Mandated Projects Award Year FY 2018 Pass-Through Agency Alaska Native Tribal Health Consortium Pass-Through Entity Identifying Number(s) AN18-RO2 Criteria In accordance with 2 CFR 200, the City?s procurement policy must conform to the Uniform Guidance standards. This requires the City to establish a policy for small purchase procedures that covers transactions that exceed micropurchase amount ($10,000) but do not exceed the simplified acquisition threshold ($250,000). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. Condition The City executed several small purchase transactions without obtaining price or rate quotations from an adequate number of qualified sources. Cause The City did not establish a policy for small purchase to satisfy the requirements of 2 CFR 200 of Uniform Guidance. Effect or potential effect The City was not in compliance with the procurement requirement for the program. Questioned costs $156,025 Context In our testwork for procurement requirements, we noted that 2 of the 4 samples selected did not have the documentation that conformed with the Uniform Guidance procurement requirements. Identification as a repeat finding No Recommendation We recommend that the City establish a policy in regard to small purchase procedures and ensure the management is following its procurement policy and meeting the Uniform Guidance compliance requirements. Views of responsible officials Management agrees with the finding. The City is implementing new policy covering the Uniform Guidance thresholds that are established for federal programs.

Finding 2022-003 Procurement and Suspension and Disbarment - Noncompliance and Significant Deficiency in Internal Controls Over Compliance Agency U.S. Environmental Protection Agency ALN 66.202 Program Name Sanitation Facilities Improvements Congressionally Mandated Projects Award Year FY 2018 Through Agency Alaska Native Tribal Health Consortium Pass-Through Entity Identifying Number(s) AN18-RO2 Criteria Internal control policies should be established to provide reasonable assurance that an entity with which the City plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded for covered transactions under Uniform Guidance. Condition Documentation that vendors are not debarred, suspended or otherwise excluded were not retained in the City?s procurement files and thus, auditors were not able to test that the relevant internal controls were operating effectively. Cause The procurement procedures for the City did not require retention of the verification for documentation purposes, and none was evident in the file. Effect or potential effect Lack of documentation might make it harder for the City?s management to monitor compliance with the requirement. Questioned costs None noted Context Auditors were not able to verify internal controls over sampled procurements, since no documentation was retained. Identification as a repeat finding No Recommendation We recommend that management retain evidence of review that prospective vendors and suppliers are not on the suspension and debarment list for covered transactions under Uniform Guidance. Views of responsible officials Management concurs with the finding. Management is updating the internal procurement policies, procedures, and award checklists to ensure that evidence of the search, and results of the search, for suspension and debarment is being completed and filed prior to the award of any procurement activities.