Audit 341682

Information on the federal program: Federal Agency: Department of Transportation Pass-Through Entity: Indiana Department of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Compliance Requirement: Procurement – Suspension and Debarment Audit Findings: Significant Deficiency, Noncompliance Criteria: 2 CFR 180.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: a) Checking the SAM Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person.” Condition: The City could not provide documentation to support that vendors procured under the Highway Planning and Construction funding were not suspended or debarred. Cause: The City had not developed a system of internal controls that would have ensured compliance with Procurement and Suspension and Debarment compliance requirements for covered transactions. Effect: The failure to establish internal controls could have enabled noncompliance to go undetected. If vendors would have been suspended or debarred, the failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the City. Questioned costs: There are no questioned costs. Context: In a sample of two vendors with aggregate disbursements for the year ended December 31, 2022, above the $25,000 covered transaction threshold, Crowe noted the City had not completed a check for suspension and debarment nor had they obtained a contract clause from the vendor/service provider certifying that they were not suspended and/or debarred for either sample selection. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include ensuring suspension and debarment checks are performed and documented prior to entering into the transaction. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Transportation Pass-Through Entity: Indiana Department of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Compliance Requirement: Procurement – Suspension and Debarment Audit Findings: Significant Deficiency, Noncompliance Criteria: 2 CFR 180.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: a) Checking the SAM Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person.” Condition: The City could not provide documentation to support that vendors procured under the Highway Planning and Construction funding were not suspended or debarred. Cause: The City had not developed a system of internal controls that would have ensured compliance with Procurement and Suspension and Debarment compliance requirements for covered transactions. Effect: The failure to establish internal controls could have enabled noncompliance to go undetected. If vendors would have been suspended or debarred, the failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the City. Questioned costs: There are no questioned costs. Context: In a sample of two vendors with aggregate disbursements for the year ended December 31, 2022, above the $25,000 covered transaction threshold, Crowe noted the City had not completed a check for suspension and debarment nor had they obtained a contract clause from the vendor/service provider certifying that they were not suspended and/or debarred for either sample selection. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include ensuring suspension and debarment checks are performed and documented prior to entering into the transaction. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Transportation Pass-Through Entity: Indiana Department of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Compliance Requirement: Procurement – Suspension and Debarment Audit Findings: Significant Deficiency, Noncompliance Criteria: 2 CFR 180.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: a) Checking the SAM Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person.” Condition: The City could not provide documentation to support that vendors procured under the Highway Planning and Construction funding were not suspended or debarred. Cause: The City had not developed a system of internal controls that would have ensured compliance with Procurement and Suspension and Debarment compliance requirements for covered transactions. Effect: The failure to establish internal controls could have enabled noncompliance to go undetected. If vendors would have been suspended or debarred, the failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the City. Questioned costs: There are no questioned costs. Context: In a sample of two vendors with aggregate disbursements for the year ended December 31, 2022, above the $25,000 covered transaction threshold, Crowe noted the City had not completed a check for suspension and debarment nor had they obtained a contract clause from the vendor/service provider certifying that they were not suspended and/or debarred for either sample selection. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include ensuring suspension and debarment checks are performed and documented prior to entering into the transaction. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Transportation Pass-Through Entity: Indiana Department of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Compliance Requirement: Procurement – Suspension and Debarment Audit Findings: Significant Deficiency, Noncompliance Criteria: 2 CFR 180.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: a) Checking the SAM Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person.” Condition: The City could not provide documentation to support that vendors procured under the Highway Planning and Construction funding were not suspended or debarred. Cause: The City had not developed a system of internal controls that would have ensured compliance with Procurement and Suspension and Debarment compliance requirements for covered transactions. Effect: The failure to establish internal controls could have enabled noncompliance to go undetected. If vendors would have been suspended or debarred, the failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the City. Questioned costs: There are no questioned costs. Context: In a sample of two vendors with aggregate disbursements for the year ended December 31, 2022, above the $25,000 covered transaction threshold, Crowe noted the City had not completed a check for suspension and debarment nor had they obtained a contract clause from the vendor/service provider certifying that they were not suspended and/or debarred for either sample selection. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include ensuring suspension and debarment checks are performed and documented prior to entering into the transaction. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Transportation Pass-Through Entity: Indiana Department of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Compliance Requirement: Procurement – Suspension and Debarment Audit Findings: Significant Deficiency, Noncompliance Criteria: 2 CFR 180.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: a) Checking the SAM Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person.” Condition: The City could not provide documentation to support that vendors procured under the Highway Planning and Construction funding were not suspended or debarred. Cause: The City had not developed a system of internal controls that would have ensured compliance with Procurement and Suspension and Debarment compliance requirements for covered transactions. Effect: The failure to establish internal controls could have enabled noncompliance to go undetected. If vendors would have been suspended or debarred, the failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the City. Questioned costs: There are no questioned costs. Context: In a sample of two vendors with aggregate disbursements for the year ended December 31, 2022, above the $25,000 covered transaction threshold, Crowe noted the City had not completed a check for suspension and debarment nor had they obtained a contract clause from the vendor/service provider certifying that they were not suspended and/or debarred for either sample selection. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include ensuring suspension and debarment checks are performed and documented prior to entering into the transaction. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Transportation Pass-Through Entity: Indiana Department of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Compliance Requirement: Procurement – Suspension and Debarment Audit Findings: Significant Deficiency, Noncompliance Criteria: 2 CFR 180.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: a) Checking the SAM Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person.” Condition: The City could not provide documentation to support that vendors procured under the Highway Planning and Construction funding were not suspended or debarred. Cause: The City had not developed a system of internal controls that would have ensured compliance with Procurement and Suspension and Debarment compliance requirements for covered transactions. Effect: The failure to establish internal controls could have enabled noncompliance to go undetected. If vendors would have been suspended or debarred, the failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the City. Questioned costs: There are no questioned costs. Context: In a sample of two vendors with aggregate disbursements for the year ended December 31, 2022, above the $25,000 covered transaction threshold, Crowe noted the City had not completed a check for suspension and debarment nor had they obtained a contract clause from the vendor/service provider certifying that they were not suspended and/or debarred for either sample selection. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include ensuring suspension and debarment checks are performed and documented prior to entering into the transaction. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of the Treasury Pass-Through Entity: N/A – Direct Grant Federal Program: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subparts A and D, Section 200.332, establishes requirements that pass-through entities must adhere to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: City of Bloomington was unable to identify subrecipients of CSLFRF funding for the purposes of financial reporting and compliance with requirements under 2 CFR 200.332. Management misreported subrecipient activity on the SEFA, failed to include required contractual language for subrecipient awards in executed agreements, and did not perform monitoring procedures over the subrecipients that were identified during testing procedures. Cause: The City does not have an effective system of internal controls in place to effectively structure and review CSLFRF subaward agreements or to effectively monitor subrecipients. Effect: Due to lack of required information being present with agreements and the contracts not clearly differentiating between a subrecipient and a beneficiary, there could be noncompliance issues in how funds are spent and recorded by the subrecipient, which could lead to noncompliance issues for the City of Bloomington and its subrecipients. Questioned costs: There are no questioned costs. Context: The 10 subrecipients represent approximately 38%, $1,935,000, of the total award expenditures of $4,999,384. The condition reported was prevalent for each subrecipient participating in the award. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City institute a policy for the handling of subrecipients for all sources of federal funding. The City should review Title 2 Subtitle A Chapter II Part 200 Subpart A and ensure their agreements with subrecipients include all required information. Management should review Title 2 Subtitle A Chapter II Part 200 Subpart D and ensure all necessary monitoring procedures are being performed over subrecipients moving forward. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of the Treasury Pass-Through Entity: N/A – Direct Grant Federal Program: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Compliance Requirement: Reporting Audit Findings: Significant Deficiency Criteria: The US Department of Treasury’s Compliance and Reporting Guidance for State and Local Fiscal Recovery Funds requires quarterly project expenditure reports to be completed with the key line items: 1) Obligations and Expenditures 2) Subawards 3) Detailed information of any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the recipient that are greater than $50,000. For amounts less than $50,000, the recipient must report in the aggregate for these same categories of loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the recipient. Condition: City of Bloomington completed quarterly reporting in a timely manner substantiated by the City’s expenditure detail. However, management could not differentiate between subrecipients and standard vendor expenditures. Cause: The City does not have an effective system of internal controls in place to effectively review CSLFRF reporting data prior to submission to the US Department of Treasury. Effect: Subrecipient expenditures and subawards on the quarterly data submissions were overstated. Questioned costs: There are no questioned costs. Context: During our testing procedures over CSLFRF reporting, we noted that segregation of duties is not present in the Federal reporting process. The City was not able to accurately identify and report subrecipient activity within CSLFRF quarterly reports. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City implement a consistent multi-stage review process for federal data reports, which involves identifying and tracking subrecipient activity as well as expenditures by type. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of the Treasury Pass-Through Entity: N/A – Direct Grant Federal Program: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Compliance Requirement: Procurement – Suspension and Debarment Audit Findings: Significant Deficiency, Noncompliance Criteria: 2 CFR 180.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: a) Checking the SAM Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person.” Condition: The City could not provide documentation to support that vendors procured under CSLFRF funding were not suspended or debarred. Cause: The City had not developed a system of internal controls that would have ensured compliance with Procurement and Suspension and Debarment compliance requirements for covered transactions. Effect: The failure to establish internal controls could have enabled noncompliance to go undetected. If vendors would have been suspended or debarred, the failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the City. Questioned costs: There are no questioned costs. Context: In a sample of six vendors with aggregate disbursements for the year ended December 31, 2022, above the $25,000 covered transaction threshold, Crowe noted four vendors that the City had not completed a check for suspension and debarment nor had they obtained a contract clause from the vendor/service provider certifying that they were not suspended and/or debarred. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include ensuring suspension and debarment checks are performed and documented prior to entering into the transaction. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Transportation Pass-Through Entity: Indiana Department of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Compliance Requirement: Procurement – Suspension and Debarment Audit Findings: Significant Deficiency, Noncompliance Criteria: 2 CFR 180.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: a) Checking the SAM Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person.” Condition: The City could not provide documentation to support that vendors procured under the Highway Planning and Construction funding were not suspended or debarred. Cause: The City had not developed a system of internal controls that would have ensured compliance with Procurement and Suspension and Debarment compliance requirements for covered transactions. Effect: The failure to establish internal controls could have enabled noncompliance to go undetected. If vendors would have been suspended or debarred, the failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the City. Questioned costs: There are no questioned costs. Context: In a sample of two vendors with aggregate disbursements for the year ended December 31, 2022, above the $25,000 covered transaction threshold, Crowe noted the City had not completed a check for suspension and debarment nor had they obtained a contract clause from the vendor/service provider certifying that they were not suspended and/or debarred for either sample selection. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include ensuring suspension and debarment checks are performed and documented prior to entering into the transaction. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Transportation Pass-Through Entity: Indiana Department of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Compliance Requirement: Procurement – Suspension and Debarment Audit Findings: Significant Deficiency, Noncompliance Criteria: 2 CFR 180.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: a) Checking the SAM Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person.” Condition: The City could not provide documentation to support that vendors procured under the Highway Planning and Construction funding were not suspended or debarred. Cause: The City had not developed a system of internal controls that would have ensured compliance with Procurement and Suspension and Debarment compliance requirements for covered transactions. Effect: The failure to establish internal controls could have enabled noncompliance to go undetected. If vendors would have been suspended or debarred, the failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the City. Questioned costs: There are no questioned costs. Context: In a sample of two vendors with aggregate disbursements for the year ended December 31, 2022, above the $25,000 covered transaction threshold, Crowe noted the City had not completed a check for suspension and debarment nor had they obtained a contract clause from the vendor/service provider certifying that they were not suspended and/or debarred for either sample selection. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include ensuring suspension and debarment checks are performed and documented prior to entering into the transaction. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Transportation Pass-Through Entity: Indiana Department of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Compliance Requirement: Procurement – Suspension and Debarment Audit Findings: Significant Deficiency, Noncompliance Criteria: 2 CFR 180.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: a) Checking the SAM Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person.” Condition: The City could not provide documentation to support that vendors procured under the Highway Planning and Construction funding were not suspended or debarred. Cause: The City had not developed a system of internal controls that would have ensured compliance with Procurement and Suspension and Debarment compliance requirements for covered transactions. Effect: The failure to establish internal controls could have enabled noncompliance to go undetected. If vendors would have been suspended or debarred, the failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the City. Questioned costs: There are no questioned costs. Context: In a sample of two vendors with aggregate disbursements for the year ended December 31, 2022, above the $25,000 covered transaction threshold, Crowe noted the City had not completed a check for suspension and debarment nor had they obtained a contract clause from the vendor/service provider certifying that they were not suspended and/or debarred for either sample selection. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include ensuring suspension and debarment checks are performed and documented prior to entering into the transaction. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Transportation Pass-Through Entity: Indiana Department of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Compliance Requirement: Procurement – Suspension and Debarment Audit Findings: Significant Deficiency, Noncompliance Criteria: 2 CFR 180.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: a) Checking the SAM Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person.” Condition: The City could not provide documentation to support that vendors procured under the Highway Planning and Construction funding were not suspended or debarred. Cause: The City had not developed a system of internal controls that would have ensured compliance with Procurement and Suspension and Debarment compliance requirements for covered transactions. Effect: The failure to establish internal controls could have enabled noncompliance to go undetected. If vendors would have been suspended or debarred, the failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the City. Questioned costs: There are no questioned costs. Context: In a sample of two vendors with aggregate disbursements for the year ended December 31, 2022, above the $25,000 covered transaction threshold, Crowe noted the City had not completed a check for suspension and debarment nor had they obtained a contract clause from the vendor/service provider certifying that they were not suspended and/or debarred for either sample selection. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include ensuring suspension and debarment checks are performed and documented prior to entering into the transaction. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Transportation Pass-Through Entity: Indiana Department of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Compliance Requirement: Procurement – Suspension and Debarment Audit Findings: Significant Deficiency, Noncompliance Criteria: 2 CFR 180.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: a) Checking the SAM Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person.” Condition: The City could not provide documentation to support that vendors procured under the Highway Planning and Construction funding were not suspended or debarred. Cause: The City had not developed a system of internal controls that would have ensured compliance with Procurement and Suspension and Debarment compliance requirements for covered transactions. Effect: The failure to establish internal controls could have enabled noncompliance to go undetected. If vendors would have been suspended or debarred, the failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the City. Questioned costs: There are no questioned costs. Context: In a sample of two vendors with aggregate disbursements for the year ended December 31, 2022, above the $25,000 covered transaction threshold, Crowe noted the City had not completed a check for suspension and debarment nor had they obtained a contract clause from the vendor/service provider certifying that they were not suspended and/or debarred for either sample selection. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include ensuring suspension and debarment checks are performed and documented prior to entering into the transaction. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Transportation Pass-Through Entity: Indiana Department of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Compliance Requirement: Procurement – Suspension and Debarment Audit Findings: Significant Deficiency, Noncompliance Criteria: 2 CFR 180.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: a) Checking the SAM Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person.” Condition: The City could not provide documentation to support that vendors procured under the Highway Planning and Construction funding were not suspended or debarred. Cause: The City had not developed a system of internal controls that would have ensured compliance with Procurement and Suspension and Debarment compliance requirements for covered transactions. Effect: The failure to establish internal controls could have enabled noncompliance to go undetected. If vendors would have been suspended or debarred, the failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the City. Questioned costs: There are no questioned costs. Context: In a sample of two vendors with aggregate disbursements for the year ended December 31, 2022, above the $25,000 covered transaction threshold, Crowe noted the City had not completed a check for suspension and debarment nor had they obtained a contract clause from the vendor/service provider certifying that they were not suspended and/or debarred for either sample selection. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include ensuring suspension and debarment checks are performed and documented prior to entering into the transaction. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of the Treasury Pass-Through Entity: N/A – Direct Grant Federal Program: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subparts A and D, Section 200.332, establishes requirements that pass-through entities must adhere to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: City of Bloomington was unable to identify subrecipients of CSLFRF funding for the purposes of financial reporting and compliance with requirements under 2 CFR 200.332. Management misreported subrecipient activity on the SEFA, failed to include required contractual language for subrecipient awards in executed agreements, and did not perform monitoring procedures over the subrecipients that were identified during testing procedures. Cause: The City does not have an effective system of internal controls in place to effectively structure and review CSLFRF subaward agreements or to effectively monitor subrecipients. Effect: Due to lack of required information being present with agreements and the contracts not clearly differentiating between a subrecipient and a beneficiary, there could be noncompliance issues in how funds are spent and recorded by the subrecipient, which could lead to noncompliance issues for the City of Bloomington and its subrecipients. Questioned costs: There are no questioned costs. Context: The 10 subrecipients represent approximately 38%, $1,935,000, of the total award expenditures of $4,999,384. The condition reported was prevalent for each subrecipient participating in the award. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City institute a policy for the handling of subrecipients for all sources of federal funding. The City should review Title 2 Subtitle A Chapter II Part 200 Subpart A and ensure their agreements with subrecipients include all required information. Management should review Title 2 Subtitle A Chapter II Part 200 Subpart D and ensure all necessary monitoring procedures are being performed over subrecipients moving forward. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of the Treasury Pass-Through Entity: N/A – Direct Grant Federal Program: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Compliance Requirement: Reporting Audit Findings: Significant Deficiency Criteria: The US Department of Treasury’s Compliance and Reporting Guidance for State and Local Fiscal Recovery Funds requires quarterly project expenditure reports to be completed with the key line items: 1) Obligations and Expenditures 2) Subawards 3) Detailed information of any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the recipient that are greater than $50,000. For amounts less than $50,000, the recipient must report in the aggregate for these same categories of loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the recipient. Condition: City of Bloomington completed quarterly reporting in a timely manner substantiated by the City’s expenditure detail. However, management could not differentiate between subrecipients and standard vendor expenditures. Cause: The City does not have an effective system of internal controls in place to effectively review CSLFRF reporting data prior to submission to the US Department of Treasury. Effect: Subrecipient expenditures and subawards on the quarterly data submissions were overstated. Questioned costs: There are no questioned costs. Context: During our testing procedures over CSLFRF reporting, we noted that segregation of duties is not present in the Federal reporting process. The City was not able to accurately identify and report subrecipient activity within CSLFRF quarterly reports. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City implement a consistent multi-stage review process for federal data reports, which involves identifying and tracking subrecipient activity as well as expenditures by type. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of the Treasury Pass-Through Entity: N/A – Direct Grant Federal Program: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Compliance Requirement: Procurement – Suspension and Debarment Audit Findings: Significant Deficiency, Noncompliance Criteria: 2 CFR 180.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: a) Checking the SAM Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person.” Condition: The City could not provide documentation to support that vendors procured under CSLFRF funding were not suspended or debarred. Cause: The City had not developed a system of internal controls that would have ensured compliance with Procurement and Suspension and Debarment compliance requirements for covered transactions. Effect: The failure to establish internal controls could have enabled noncompliance to go undetected. If vendors would have been suspended or debarred, the failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the City. Questioned costs: There are no questioned costs. Context: In a sample of six vendors with aggregate disbursements for the year ended December 31, 2022, above the $25,000 covered transaction threshold, Crowe noted four vendors that the City had not completed a check for suspension and debarment nor had they obtained a contract clause from the vendor/service provider certifying that they were not suspended and/or debarred. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the City establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include ensuring suspension and debarment checks are performed and documented prior to entering into the transaction. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.