Audit 334656

Section III – Federal Award Findings and Questioned Costs Finding 2024-001 – Internal Controls for Federally Funded Procurements which are Covered Transactions (Significant Deficiency) Impacted Federal Programs: Federal Agency: Department of Treasury Pass-through Entity: State of Nevada CASA Association Program: COVID-19 Corona State and Local Fiscal Recovery Fund (CSLFR) Assistance Listing No.: 21.027 Federal Award Number: SLFRF2634 Criteria: As a condition of receiving federal funds, Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal 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 | Home (click on Search Record, then click on Advanced Search-Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (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 walkthrough of the internal controls assessment of procurement for the CSLFR program, we had noted that there was no evidence of internal controls in place to check against applicable listings that vendors were not debarred, suspended, or otherwise excluded. Cause: Management did not include reviewing Sam.gov for a vendor’s status as part of the procurement process prior to entering into a covered transaction. Effect: The Court could unknowingly enter into covered transactions with an entity that is suspended or debarred leading to non-compliance. Questioned Costs: None Context: A total of 12 procurements totaling $501,000 in federal expenditures, met the definition of covered transactions and thus were subject to the suspension and debarment compliance requirements. These 12 procurements did not include a check prior to the agreements of each vendor’s status. Subsequent to entering into the transaction, management verified that all 12 vendors were found not to be suspended, debarred, or otherwise excluded when reviewing Sam.Gov. Recommendation: We recommend the Court update their procurement policies and procedures to include a requirement to review applicable listings in Sam.Gov for a vendor’s suspension and debarment status prior to entering into covered transactions. Management’s Response See Corrective Action Plan.

Section III – Federal Award Findings and Questioned Costs Finding 2024-001 – Internal Controls for Federally Funded Procurements which are Covered Transactions (Significant Deficiency) Impacted Federal Programs: Federal Agency: Department of Treasury Pass-through Entity: State of Nevada CASA Association Program: COVID-19 Corona State and Local Fiscal Recovery Fund (CSLFR) Assistance Listing No.: 21.027 Federal Award Number: SLFRF2634 Criteria: As a condition of receiving federal funds, Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal 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 | Home (click on Search Record, then click on Advanced Search-Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (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 walkthrough of the internal controls assessment of procurement for the CSLFR program, we had noted that there was no evidence of internal controls in place to check against applicable listings that vendors were not debarred, suspended, or otherwise excluded. Cause: Management did not include reviewing Sam.gov for a vendor’s status as part of the procurement process prior to entering into a covered transaction. Effect: The Court could unknowingly enter into covered transactions with an entity that is suspended or debarred leading to non-compliance. Questioned Costs: None Context: A total of 12 procurements totaling $501,000 in federal expenditures, met the definition of covered transactions and thus were subject to the suspension and debarment compliance requirements. These 12 procurements did not include a check prior to the agreements of each vendor’s status. Subsequent to entering into the transaction, management verified that all 12 vendors were found not to be suspended, debarred, or otherwise excluded when reviewing Sam.Gov. Recommendation: We recommend the Court update their procurement policies and procedures to include a requirement to review applicable listings in Sam.Gov for a vendor’s suspension and debarment status prior to entering into covered transactions. Management’s Response See Corrective Action Plan.