Audit 337592

2023-004 Procurement, Suspension, and Debarment Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP1274, 2021 Pass-Through Agency: N/A – Federal Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 U.S. Code of Federal Regulations § 200.318(i) states that the County must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Additionally, the County must follow further federal guidance over full and open competition as provided in Title 2 U.S. Code of Federal Regulations § 200.319, and perform a cost or price analysis as provided in Title 2 U.S. Code of Federal Regulations § 200.324. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. Condition: For two procurements tested above the micro-purchase threshold, documentation of the history of the procurement, providing full and open competition, and a cost or price analysis was not available. For the one covered transaction tested, the verification for suspended or debarred vendors was not performed before entering into the covered transaction. Questioned Costs: None. Context: Two of five contracts were tested for compliance with applicable federal regulations. Additionally, one covered transaction was subject to suspension and debarment. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: It cannot be determined that the contracting process was open and fair because the County did not document the rationale for the contractor selection. It also cannot be determined that an entity was not suspended, debarred, or otherwise excluded from conducting business with the County. Cause: The County did not maintain the necessary documentation to allow the auditor to test for procurement and suspension and debarment. Recommendation: We recommend the County maintain documentation on the history of a procurement, provide for full and open competition, and perform a cost or price analysis to support compliance with Title 2 U.S. Code of Federal Regulations §§ 200.318, 200.319, and 200.324. We further recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Concur

2023-004 Procurement, Suspension, and Debarment Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP1274, 2021 Pass-Through Agency: N/A – Federal Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 U.S. Code of Federal Regulations § 200.318(i) states that the County must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Additionally, the County must follow further federal guidance over full and open competition as provided in Title 2 U.S. Code of Federal Regulations § 200.319, and perform a cost or price analysis as provided in Title 2 U.S. Code of Federal Regulations § 200.324. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. Condition: For two procurements tested above the micro-purchase threshold, documentation of the history of the procurement, providing full and open competition, and a cost or price analysis was not available. For the one covered transaction tested, the verification for suspended or debarred vendors was not performed before entering into the covered transaction. Questioned Costs: None. Context: Two of five contracts were tested for compliance with applicable federal regulations. Additionally, one covered transaction was subject to suspension and debarment. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: It cannot be determined that the contracting process was open and fair because the County did not document the rationale for the contractor selection. It also cannot be determined that an entity was not suspended, debarred, or otherwise excluded from conducting business with the County. Cause: The County did not maintain the necessary documentation to allow the auditor to test for procurement and suspension and debarment. Recommendation: We recommend the County maintain documentation on the history of a procurement, provide for full and open competition, and perform a cost or price analysis to support compliance with Title 2 U.S. Code of Federal Regulations §§ 200.318, 200.319, and 200.324. We further recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Concur