Develop Written Policies and Procedures
Criteria:
2 CFR 200.303 requires nonfederal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that organizations who manage the federal award:
• Understand and comply with the federal statutes, regulations, and terms and conditions of the award;
• Evaluate and monitor compliance;
• Take prompt action when instances of noncompliance is identified.
These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, the Uniform Guidance requires non-federal entities to develop written procedures related to the following areas:
1. Cash Management
2 CFR 200.302(b)(6) states that the financial management system of each non-Federal entity must provide for the written procedures to implement the requirements of 2 CFR 200.305 Federal Payment.
2. Equipment Management Requirements
Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e).
In addition, the organizations should ensure that existing written procedures are in compliance with:
a. General Procurement Standards
2 CFR 200.318 to 200.327 discusses that contracts must be established and managed in accordance with the procurement requirements in 2 CFR Part 200. Grantees must have written procurement policies and procedures that demonstrate a fair and reliable process, with standards of conduct addressing conflicts of interest, for obtaining grant-funded goods and services.
Condition
MARTA does not have comprehensive written policies and procedures concerning the following key compliance areas which are required by the Uniform Guidance:
Equipment and Real Property Management
MARTA has an Asset Inventory Policy and Procedures, however, it does not clearly define the policies and procedures that are in place for the use, management and disposition of equipment acquired under a Federal award in accordance with 2 CFR sections 200.313(c) through (e).
Cash Management
MARTA does not have written procedures to implement the requirements of 2 CFR 200.305 Federal Payment.
Procurement, Suspension and Debarment
MARTA has a Procurement policy, however, documented procedures are not well-defined regarding the purchase process for different types of procurement, obtaining quotations, bidding, and procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded.
Cause
MARTA’s reliance on informal business practices leads to inconsistencies in its internal controls.
Effect
The absence of formal policies and procedures in the key compliance areas could result in non-compliance with federal regulations, which may lead to unnecessary sanctions. Additionally, without formal written policies and procedures, it is difficult to ensure consistent practices across the organization.
Questioned Costs
None
Recommendation
MARTA should develop and implement formal written policies and procedures for the specific areas required by the Uniform Guidance. These policies and procedures must clearly delineate the requirements of the Uniform Guidance. Personnel responsible for these areas should receive adequate training and apply the policies effectively. Regular reviews should be conducted to update the policies and procedures as needed.
Views of Responsible Officials and Planned Corrective Action
MARTA has grown substantially in the last several years. This progress includes identifying areas that we need to update or to develop new processes and documentation.
MARTA has an Asset Inventory Policy and Procedures in which the purpose is to ensure that fixed assets are properly accounted for, identified, and tracked.
MARTA also has Cash Handling Policy and Procedures which addresses safeguarding public funds and maximizing resources available. This is designed to reduce the risks associated with the collection, receipts storage and reporting of cash transactions and to safeguard and maintain the security and integrity of MARTA's fiscal assets.
MARTA is in the process of updating the Procurement Policy.
MARTA will review and update these policies and/or create new policies to make sure that they are compliant with the Uniform Guidance. The updated or newly created policies will be brought to the October 2025 Board of Directors meeting for Board review or approval.
Personnel responsible: Sandy Benson, General Manager
Anticipated completion date: October 2025
Procurement, Suspension and Debarment
Criteria
Procurement
Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow specific procurement standards set out in 2 CFR sections 200.317 through 200.327, which includes documenting the procurement methods used for vendor selection. These procedures are designed to ensure fair competition, cost-effectiveness, and federal requirements.
These procurement standards require, among other provisions, that a non-federal entity must:
1. Meet the general procurement standards in 2 CFR Section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to reliable contractors, and maintaining records to document the history of procurement.
2. Conduct all procurement transactions for the acquisition of property or services under a federal award in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320.
3. Use documented procurement procedures, consistent with the standards of 2 CFR 200.317 to 320. 2 CFR 200.320 enumerates below the different procurement methods that a non-federal entity should use:
a) The micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $50,000.
b) Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold.
The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations.
c) Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)).
4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b) (1); the competitive proposals method under the conditions specified in 2 CFR section 200.320(b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)).
5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)).
6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.”
Suspension and Debarment
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 audit, MARTA was unable to provide purchase order documentation or contract for eight samples that are above $500. Per current procurement policy, “Purchases of supplies, services, and equipment costing more than five hundred ($500) shall be made by purchase order, unless authorized by a signed contract or Mountain Transit Board Approval”.
During our audit, MARTA was unable to provide supporting documentation to demonstrate that the required price or rate quotations for those purchases or contracts with contract amounts above $10,000 were obtained from an adequate number of qualified sources and maintained the documentation to support its conclusion. These were noted for two samples tested. The expenditure paid ranged from $10,000 to $36,000 in 2024.
During our audit, MARTA was unable to provide supporting documentation to demonstrate that the process of verifying if vendors are not suspended or debarred was performed on two vendors tested. The expenditure paid to these vendors ranged from $109,000 to $647,000 in 2024.
Cause
MARTA did not follow its existing purchasing policy and procedures, and lack of procedures in maintaining appropriate records of vendor selection and compliance with procurement standards.
Effect
The absence of procurement documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances or unnecessary sanctions.
Questioned Costs
None
Recommendation
MARTA should strengthen its internal controls over procurement by ensuring that all procurement activities, particularly significant expenditures, are properly documented. This includes retaining evidence that procurement methods required by the Uniform Guidance were followed, such as bids, contracts, or justifications for sole-source vendors. MARTA should also conduct training for staff involved in procurement to ensure awareness and adherence to the policies. Regular internal audits may be implemented to verify compliance with procurement procedures.
Views of Responsible Officials and Planned Corrective Action
MARTA is in the process of updating the Procurement Policy. MARTA will ensure that updated policies and procedures will be implemented to address compliance and documentation requirements for small and micro-purchases, sole-source, and informal processes.
The updated Procurement Policy will be brought to the October 2025 Board of Directors meeting for Board review or approval.
Personnel responsible: Sandy Benson, General Manager
Anticipated completion date: October 2025
Allowable costs – Payroll
Criteria
Except where otherwise authorized by statute, cost must meet the following general criteria in order to be allowable under federal awards;
1. Be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E.
2. Conform to any limitations or exclusions set forth in 2 CFR Part 200, Subpart E or in the federal award as to types or amount of cost items.
3. Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity.
4. Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost.
5. Be determined in accordance with generally accepted accounting principles (GAAP), except for state and local governments and Indian tribes only as otherwise provided for in 2 CFR Part 200.
6. Not be included as a cost or used to meet cost-sharing or matching requirements of any other federally financed program in either the current or a prior period.
7. Be adequately documented.
Condition
During the audit of payroll expenses charged to the program, it was noted that four samples have Personnel Action Forms (PAF) without the signature of the General Manager. Per current policies and procedures, for pay rate changes, a PAF should be created by the HR Manager and signed by the General Manager.
Additionally, MARTA was unable to provide PAF for four samples.
Cause
The PAFs without final signature were not submitted to the General Manager. There was also difficulty in finding the missing PAFs which might be due to a lack of proper file management.
Effect
The absence of approval and adequate documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances of costs.
Questioned Costs
None
Recommendation
MARTA should strengthen its internal controls over the payroll process by ensuring that all PAFs are reviewed for accuracy and properly approved. MARTA should ensure that PAF and timecards are adequately documented and filed.
Views of Responsible Officials and Planned Corrective Action
The HR Manager will review the procedures for processing PAF, communicate more effectively to close the loop on paperwork process, and confirm authorized signatures. The HR Manager will review all files for completed PAF forms and practice better diligence going forward in maintaining all documentation in personnel files.
Personnel responsible: Jacob Phillips, HR Manager
Anticipated completion date: Effective immediately
Develop Written Policies and Procedures
Criteria:
2 CFR 200.303 requires nonfederal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that organizations who manage the federal award:
• Understand and comply with the federal statutes, regulations, and terms and conditions of the award;
• Evaluate and monitor compliance;
• Take prompt action when instances of noncompliance is identified.
These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, the Uniform Guidance requires non-federal entities to develop written procedures related to the following areas:
1. Cash Management
2 CFR 200.302(b)(6) states that the financial management system of each non-Federal entity must provide for the written procedures to implement the requirements of 2 CFR 200.305 Federal Payment.
2. Equipment Management Requirements
Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e).
In addition, the organizations should ensure that existing written procedures are in compliance with:
a. General Procurement Standards
2 CFR 200.318 to 200.327 discusses that contracts must be established and managed in accordance with the procurement requirements in 2 CFR Part 200. Grantees must have written procurement policies and procedures that demonstrate a fair and reliable process, with standards of conduct addressing conflicts of interest, for obtaining grant-funded goods and services.
Condition
MARTA does not have comprehensive written policies and procedures concerning the following key compliance areas which are required by the Uniform Guidance:
Equipment and Real Property Management
MARTA has an Asset Inventory Policy and Procedures, however, it does not clearly define the policies and procedures that are in place for the use, management and disposition of equipment acquired under a Federal award in accordance with 2 CFR sections 200.313(c) through (e).
Cash Management
MARTA does not have written procedures to implement the requirements of 2 CFR 200.305 Federal Payment.
Procurement, Suspension and Debarment
MARTA has a Procurement policy, however, documented procedures are not well-defined regarding the purchase process for different types of procurement, obtaining quotations, bidding, and procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded.
Cause
MARTA’s reliance on informal business practices leads to inconsistencies in its internal controls.
Effect
The absence of formal policies and procedures in the key compliance areas could result in non-compliance with federal regulations, which may lead to unnecessary sanctions. Additionally, without formal written policies and procedures, it is difficult to ensure consistent practices across the organization.
Questioned Costs
None
Recommendation
MARTA should develop and implement formal written policies and procedures for the specific areas required by the Uniform Guidance. These policies and procedures must clearly delineate the requirements of the Uniform Guidance. Personnel responsible for these areas should receive adequate training and apply the policies effectively. Regular reviews should be conducted to update the policies and procedures as needed.
Views of Responsible Officials and Planned Corrective Action
MARTA has grown substantially in the last several years. This progress includes identifying areas that we need to update or to develop new processes and documentation.
MARTA has an Asset Inventory Policy and Procedures in which the purpose is to ensure that fixed assets are properly accounted for, identified, and tracked.
MARTA also has Cash Handling Policy and Procedures which addresses safeguarding public funds and maximizing resources available. This is designed to reduce the risks associated with the collection, receipts storage and reporting of cash transactions and to safeguard and maintain the security and integrity of MARTA's fiscal assets.
MARTA is in the process of updating the Procurement Policy.
MARTA will review and update these policies and/or create new policies to make sure that they are compliant with the Uniform Guidance. The updated or newly created policies will be brought to the October 2025 Board of Directors meeting for Board review or approval.
Personnel responsible: Sandy Benson, General Manager
Anticipated completion date: October 2025
Procurement, Suspension and Debarment
Criteria
Procurement
Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow specific procurement standards set out in 2 CFR sections 200.317 through 200.327, which includes documenting the procurement methods used for vendor selection. These procedures are designed to ensure fair competition, cost-effectiveness, and federal requirements.
These procurement standards require, among other provisions, that a non-federal entity must:
1. Meet the general procurement standards in 2 CFR Section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to reliable contractors, and maintaining records to document the history of procurement.
2. Conduct all procurement transactions for the acquisition of property or services under a federal award in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320.
3. Use documented procurement procedures, consistent with the standards of 2 CFR 200.317 to 320. 2 CFR 200.320 enumerates below the different procurement methods that a non-federal entity should use:
a) The micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $50,000.
b) Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold.
The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations.
c) Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)).
4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b) (1); the competitive proposals method under the conditions specified in 2 CFR section 200.320(b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)).
5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)).
6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.”
Suspension and Debarment
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 audit, MARTA was unable to provide purchase order documentation or contract for eight samples that are above $500. Per current procurement policy, “Purchases of supplies, services, and equipment costing more than five hundred ($500) shall be made by purchase order, unless authorized by a signed contract or Mountain Transit Board Approval”.
During our audit, MARTA was unable to provide supporting documentation to demonstrate that the required price or rate quotations for those purchases or contracts with contract amounts above $10,000 were obtained from an adequate number of qualified sources and maintained the documentation to support its conclusion. These were noted for two samples tested. The expenditure paid ranged from $10,000 to $36,000 in 2024.
During our audit, MARTA was unable to provide supporting documentation to demonstrate that the process of verifying if vendors are not suspended or debarred was performed on two vendors tested. The expenditure paid to these vendors ranged from $109,000 to $647,000 in 2024.
Cause
MARTA did not follow its existing purchasing policy and procedures, and lack of procedures in maintaining appropriate records of vendor selection and compliance with procurement standards.
Effect
The absence of procurement documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances or unnecessary sanctions.
Questioned Costs
None
Recommendation
MARTA should strengthen its internal controls over procurement by ensuring that all procurement activities, particularly significant expenditures, are properly documented. This includes retaining evidence that procurement methods required by the Uniform Guidance were followed, such as bids, contracts, or justifications for sole-source vendors. MARTA should also conduct training for staff involved in procurement to ensure awareness and adherence to the policies. Regular internal audits may be implemented to verify compliance with procurement procedures.
Views of Responsible Officials and Planned Corrective Action
MARTA is in the process of updating the Procurement Policy. MARTA will ensure that updated policies and procedures will be implemented to address compliance and documentation requirements for small and micro-purchases, sole-source, and informal processes.
The updated Procurement Policy will be brought to the October 2025 Board of Directors meeting for Board review or approval.
Personnel responsible: Sandy Benson, General Manager
Anticipated completion date: October 2025
Allowable costs – Payroll
Criteria
Except where otherwise authorized by statute, cost must meet the following general criteria in order to be allowable under federal awards;
1. Be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E.
2. Conform to any limitations or exclusions set forth in 2 CFR Part 200, Subpart E or in the federal award as to types or amount of cost items.
3. Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity.
4. Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost.
5. Be determined in accordance with generally accepted accounting principles (GAAP), except for state and local governments and Indian tribes only as otherwise provided for in 2 CFR Part 200.
6. Not be included as a cost or used to meet cost-sharing or matching requirements of any other federally financed program in either the current or a prior period.
7. Be adequately documented.
Condition
During the audit of payroll expenses charged to the program, it was noted that four samples have Personnel Action Forms (PAF) without the signature of the General Manager. Per current policies and procedures, for pay rate changes, a PAF should be created by the HR Manager and signed by the General Manager.
Additionally, MARTA was unable to provide PAF for four samples.
Cause
The PAFs without final signature were not submitted to the General Manager. There was also difficulty in finding the missing PAFs which might be due to a lack of proper file management.
Effect
The absence of approval and adequate documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances of costs.
Questioned Costs
None
Recommendation
MARTA should strengthen its internal controls over the payroll process by ensuring that all PAFs are reviewed for accuracy and properly approved. MARTA should ensure that PAF and timecards are adequately documented and filed.
Views of Responsible Officials and Planned Corrective Action
The HR Manager will review the procedures for processing PAF, communicate more effectively to close the loop on paperwork process, and confirm authorized signatures. The HR Manager will review all files for completed PAF forms and practice better diligence going forward in maintaining all documentation in personnel files.
Personnel responsible: Jacob Phillips, HR Manager
Anticipated completion date: Effective immediately
Develop Written Policies and Procedures
Criteria:
2 CFR 200.303 requires nonfederal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that organizations who manage the federal award:
• Understand and comply with the federal statutes, regulations, and terms and conditions of the award;
• Evaluate and monitor compliance;
• Take prompt action when instances of noncompliance is identified.
These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, the Uniform Guidance requires non-federal entities to develop written procedures related to the following areas:
1. Cash Management
2 CFR 200.302(b)(6) states that the financial management system of each non-Federal entity must provide for the written procedures to implement the requirements of 2 CFR 200.305 Federal Payment.
2. Equipment Management Requirements
Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e).
In addition, the organizations should ensure that existing written procedures are in compliance with:
a. General Procurement Standards
2 CFR 200.318 to 200.327 discusses that contracts must be established and managed in accordance with the procurement requirements in 2 CFR Part 200. Grantees must have written procurement policies and procedures that demonstrate a fair and reliable process, with standards of conduct addressing conflicts of interest, for obtaining grant-funded goods and services.
Condition
MARTA does not have comprehensive written policies and procedures concerning the following key compliance areas which are required by the Uniform Guidance:
Equipment and Real Property Management
MARTA has an Asset Inventory Policy and Procedures, however, it does not clearly define the policies and procedures that are in place for the use, management and disposition of equipment acquired under a Federal award in accordance with 2 CFR sections 200.313(c) through (e).
Cash Management
MARTA does not have written procedures to implement the requirements of 2 CFR 200.305 Federal Payment.
Procurement, Suspension and Debarment
MARTA has a Procurement policy, however, documented procedures are not well-defined regarding the purchase process for different types of procurement, obtaining quotations, bidding, and procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded.
Cause
MARTA’s reliance on informal business practices leads to inconsistencies in its internal controls.
Effect
The absence of formal policies and procedures in the key compliance areas could result in non-compliance with federal regulations, which may lead to unnecessary sanctions. Additionally, without formal written policies and procedures, it is difficult to ensure consistent practices across the organization.
Questioned Costs
None
Recommendation
MARTA should develop and implement formal written policies and procedures for the specific areas required by the Uniform Guidance. These policies and procedures must clearly delineate the requirements of the Uniform Guidance. Personnel responsible for these areas should receive adequate training and apply the policies effectively. Regular reviews should be conducted to update the policies and procedures as needed.
Views of Responsible Officials and Planned Corrective Action
MARTA has grown substantially in the last several years. This progress includes identifying areas that we need to update or to develop new processes and documentation.
MARTA has an Asset Inventory Policy and Procedures in which the purpose is to ensure that fixed assets are properly accounted for, identified, and tracked.
MARTA also has Cash Handling Policy and Procedures which addresses safeguarding public funds and maximizing resources available. This is designed to reduce the risks associated with the collection, receipts storage and reporting of cash transactions and to safeguard and maintain the security and integrity of MARTA's fiscal assets.
MARTA is in the process of updating the Procurement Policy.
MARTA will review and update these policies and/or create new policies to make sure that they are compliant with the Uniform Guidance. The updated or newly created policies will be brought to the October 2025 Board of Directors meeting for Board review or approval.
Personnel responsible: Sandy Benson, General Manager
Anticipated completion date: October 2025
Procurement, Suspension and Debarment
Criteria
Procurement
Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow specific procurement standards set out in 2 CFR sections 200.317 through 200.327, which includes documenting the procurement methods used for vendor selection. These procedures are designed to ensure fair competition, cost-effectiveness, and federal requirements.
These procurement standards require, among other provisions, that a non-federal entity must:
1. Meet the general procurement standards in 2 CFR Section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to reliable contractors, and maintaining records to document the history of procurement.
2. Conduct all procurement transactions for the acquisition of property or services under a federal award in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320.
3. Use documented procurement procedures, consistent with the standards of 2 CFR 200.317 to 320. 2 CFR 200.320 enumerates below the different procurement methods that a non-federal entity should use:
a) The micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $50,000.
b) Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold.
The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations.
c) Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)).
4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b) (1); the competitive proposals method under the conditions specified in 2 CFR section 200.320(b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)).
5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)).
6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.”
Suspension and Debarment
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 audit, MARTA was unable to provide purchase order documentation or contract for eight samples that are above $500. Per current procurement policy, “Purchases of supplies, services, and equipment costing more than five hundred ($500) shall be made by purchase order, unless authorized by a signed contract or Mountain Transit Board Approval”.
During our audit, MARTA was unable to provide supporting documentation to demonstrate that the required price or rate quotations for those purchases or contracts with contract amounts above $10,000 were obtained from an adequate number of qualified sources and maintained the documentation to support its conclusion. These were noted for two samples tested. The expenditure paid ranged from $10,000 to $36,000 in 2024.
During our audit, MARTA was unable to provide supporting documentation to demonstrate that the process of verifying if vendors are not suspended or debarred was performed on two vendors tested. The expenditure paid to these vendors ranged from $109,000 to $647,000 in 2024.
Cause
MARTA did not follow its existing purchasing policy and procedures, and lack of procedures in maintaining appropriate records of vendor selection and compliance with procurement standards.
Effect
The absence of procurement documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances or unnecessary sanctions.
Questioned Costs
None
Recommendation
MARTA should strengthen its internal controls over procurement by ensuring that all procurement activities, particularly significant expenditures, are properly documented. This includes retaining evidence that procurement methods required by the Uniform Guidance were followed, such as bids, contracts, or justifications for sole-source vendors. MARTA should also conduct training for staff involved in procurement to ensure awareness and adherence to the policies. Regular internal audits may be implemented to verify compliance with procurement procedures.
Views of Responsible Officials and Planned Corrective Action
MARTA is in the process of updating the Procurement Policy. MARTA will ensure that updated policies and procedures will be implemented to address compliance and documentation requirements for small and micro-purchases, sole-source, and informal processes.
The updated Procurement Policy will be brought to the October 2025 Board of Directors meeting for Board review or approval.
Personnel responsible: Sandy Benson, General Manager
Anticipated completion date: October 2025
Allowable costs – Payroll
Criteria
Except where otherwise authorized by statute, cost must meet the following general criteria in order to be allowable under federal awards;
1. Be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E.
2. Conform to any limitations or exclusions set forth in 2 CFR Part 200, Subpart E or in the federal award as to types or amount of cost items.
3. Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity.
4. Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost.
5. Be determined in accordance with generally accepted accounting principles (GAAP), except for state and local governments and Indian tribes only as otherwise provided for in 2 CFR Part 200.
6. Not be included as a cost or used to meet cost-sharing or matching requirements of any other federally financed program in either the current or a prior period.
7. Be adequately documented.
Condition
During the audit of payroll expenses charged to the program, it was noted that four samples have Personnel Action Forms (PAF) without the signature of the General Manager. Per current policies and procedures, for pay rate changes, a PAF should be created by the HR Manager and signed by the General Manager.
Additionally, MARTA was unable to provide PAF for four samples.
Cause
The PAFs without final signature were not submitted to the General Manager. There was also difficulty in finding the missing PAFs which might be due to a lack of proper file management.
Effect
The absence of approval and adequate documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances of costs.
Questioned Costs
None
Recommendation
MARTA should strengthen its internal controls over the payroll process by ensuring that all PAFs are reviewed for accuracy and properly approved. MARTA should ensure that PAF and timecards are adequately documented and filed.
Views of Responsible Officials and Planned Corrective Action
The HR Manager will review the procedures for processing PAF, communicate more effectively to close the loop on paperwork process, and confirm authorized signatures. The HR Manager will review all files for completed PAF forms and practice better diligence going forward in maintaining all documentation in personnel files.
Personnel responsible: Jacob Phillips, HR Manager
Anticipated completion date: Effective immediately
Develop Written Policies and Procedures
Criteria:
2 CFR 200.303 requires nonfederal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that organizations who manage the federal award:
• Understand and comply with the federal statutes, regulations, and terms and conditions of the award;
• Evaluate and monitor compliance;
• Take prompt action when instances of noncompliance is identified.
These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, the Uniform Guidance requires non-federal entities to develop written procedures related to the following areas:
1. Cash Management
2 CFR 200.302(b)(6) states that the financial management system of each non-Federal entity must provide for the written procedures to implement the requirements of 2 CFR 200.305 Federal Payment.
2. Equipment Management Requirements
Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e).
In addition, the organizations should ensure that existing written procedures are in compliance with:
a. General Procurement Standards
2 CFR 200.318 to 200.327 discusses that contracts must be established and managed in accordance with the procurement requirements in 2 CFR Part 200. Grantees must have written procurement policies and procedures that demonstrate a fair and reliable process, with standards of conduct addressing conflicts of interest, for obtaining grant-funded goods and services.
Condition
MARTA does not have comprehensive written policies and procedures concerning the following key compliance areas which are required by the Uniform Guidance:
Equipment and Real Property Management
MARTA has an Asset Inventory Policy and Procedures, however, it does not clearly define the policies and procedures that are in place for the use, management and disposition of equipment acquired under a Federal award in accordance with 2 CFR sections 200.313(c) through (e).
Cash Management
MARTA does not have written procedures to implement the requirements of 2 CFR 200.305 Federal Payment.
Procurement, Suspension and Debarment
MARTA has a Procurement policy, however, documented procedures are not well-defined regarding the purchase process for different types of procurement, obtaining quotations, bidding, and procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded.
Cause
MARTA’s reliance on informal business practices leads to inconsistencies in its internal controls.
Effect
The absence of formal policies and procedures in the key compliance areas could result in non-compliance with federal regulations, which may lead to unnecessary sanctions. Additionally, without formal written policies and procedures, it is difficult to ensure consistent practices across the organization.
Questioned Costs
None
Recommendation
MARTA should develop and implement formal written policies and procedures for the specific areas required by the Uniform Guidance. These policies and procedures must clearly delineate the requirements of the Uniform Guidance. Personnel responsible for these areas should receive adequate training and apply the policies effectively. Regular reviews should be conducted to update the policies and procedures as needed.
Views of Responsible Officials and Planned Corrective Action
MARTA has grown substantially in the last several years. This progress includes identifying areas that we need to update or to develop new processes and documentation.
MARTA has an Asset Inventory Policy and Procedures in which the purpose is to ensure that fixed assets are properly accounted for, identified, and tracked.
MARTA also has Cash Handling Policy and Procedures which addresses safeguarding public funds and maximizing resources available. This is designed to reduce the risks associated with the collection, receipts storage and reporting of cash transactions and to safeguard and maintain the security and integrity of MARTA's fiscal assets.
MARTA is in the process of updating the Procurement Policy.
MARTA will review and update these policies and/or create new policies to make sure that they are compliant with the Uniform Guidance. The updated or newly created policies will be brought to the October 2025 Board of Directors meeting for Board review or approval.
Personnel responsible: Sandy Benson, General Manager
Anticipated completion date: October 2025
Procurement, Suspension and Debarment
Criteria
Procurement
Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow specific procurement standards set out in 2 CFR sections 200.317 through 200.327, which includes documenting the procurement methods used for vendor selection. These procedures are designed to ensure fair competition, cost-effectiveness, and federal requirements.
These procurement standards require, among other provisions, that a non-federal entity must:
1. Meet the general procurement standards in 2 CFR Section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to reliable contractors, and maintaining records to document the history of procurement.
2. Conduct all procurement transactions for the acquisition of property or services under a federal award in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320.
3. Use documented procurement procedures, consistent with the standards of 2 CFR 200.317 to 320. 2 CFR 200.320 enumerates below the different procurement methods that a non-federal entity should use:
a) The micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $50,000.
b) Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold.
The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations.
c) Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)).
4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b) (1); the competitive proposals method under the conditions specified in 2 CFR section 200.320(b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)).
5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)).
6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.”
Suspension and Debarment
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 audit, MARTA was unable to provide purchase order documentation or contract for eight samples that are above $500. Per current procurement policy, “Purchases of supplies, services, and equipment costing more than five hundred ($500) shall be made by purchase order, unless authorized by a signed contract or Mountain Transit Board Approval”.
During our audit, MARTA was unable to provide supporting documentation to demonstrate that the required price or rate quotations for those purchases or contracts with contract amounts above $10,000 were obtained from an adequate number of qualified sources and maintained the documentation to support its conclusion. These were noted for two samples tested. The expenditure paid ranged from $10,000 to $36,000 in 2024.
During our audit, MARTA was unable to provide supporting documentation to demonstrate that the process of verifying if vendors are not suspended or debarred was performed on two vendors tested. The expenditure paid to these vendors ranged from $109,000 to $647,000 in 2024.
Cause
MARTA did not follow its existing purchasing policy and procedures, and lack of procedures in maintaining appropriate records of vendor selection and compliance with procurement standards.
Effect
The absence of procurement documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances or unnecessary sanctions.
Questioned Costs
None
Recommendation
MARTA should strengthen its internal controls over procurement by ensuring that all procurement activities, particularly significant expenditures, are properly documented. This includes retaining evidence that procurement methods required by the Uniform Guidance were followed, such as bids, contracts, or justifications for sole-source vendors. MARTA should also conduct training for staff involved in procurement to ensure awareness and adherence to the policies. Regular internal audits may be implemented to verify compliance with procurement procedures.
Views of Responsible Officials and Planned Corrective Action
MARTA is in the process of updating the Procurement Policy. MARTA will ensure that updated policies and procedures will be implemented to address compliance and documentation requirements for small and micro-purchases, sole-source, and informal processes.
The updated Procurement Policy will be brought to the October 2025 Board of Directors meeting for Board review or approval.
Personnel responsible: Sandy Benson, General Manager
Anticipated completion date: October 2025
Allowable costs – Payroll
Criteria
Except where otherwise authorized by statute, cost must meet the following general criteria in order to be allowable under federal awards;
1. Be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E.
2. Conform to any limitations or exclusions set forth in 2 CFR Part 200, Subpart E or in the federal award as to types or amount of cost items.
3. Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity.
4. Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost.
5. Be determined in accordance with generally accepted accounting principles (GAAP), except for state and local governments and Indian tribes only as otherwise provided for in 2 CFR Part 200.
6. Not be included as a cost or used to meet cost-sharing or matching requirements of any other federally financed program in either the current or a prior period.
7. Be adequately documented.
Condition
During the audit of payroll expenses charged to the program, it was noted that four samples have Personnel Action Forms (PAF) without the signature of the General Manager. Per current policies and procedures, for pay rate changes, a PAF should be created by the HR Manager and signed by the General Manager.
Additionally, MARTA was unable to provide PAF for four samples.
Cause
The PAFs without final signature were not submitted to the General Manager. There was also difficulty in finding the missing PAFs which might be due to a lack of proper file management.
Effect
The absence of approval and adequate documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances of costs.
Questioned Costs
None
Recommendation
MARTA should strengthen its internal controls over the payroll process by ensuring that all PAFs are reviewed for accuracy and properly approved. MARTA should ensure that PAF and timecards are adequately documented and filed.
Views of Responsible Officials and Planned Corrective Action
The HR Manager will review the procedures for processing PAF, communicate more effectively to close the loop on paperwork process, and confirm authorized signatures. The HR Manager will review all files for completed PAF forms and practice better diligence going forward in maintaining all documentation in personnel files.
Personnel responsible: Jacob Phillips, HR Manager
Anticipated completion date: Effective immediately
Develop Written Policies and Procedures
Criteria:
2 CFR 200.303 requires nonfederal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that organizations who manage the federal award:
• Understand and comply with the federal statutes, regulations, and terms and conditions of the award;
• Evaluate and monitor compliance;
• Take prompt action when instances of noncompliance is identified.
These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, the Uniform Guidance requires non-federal entities to develop written procedures related to the following areas:
1. Cash Management
2 CFR 200.302(b)(6) states that the financial management system of each non-Federal entity must provide for the written procedures to implement the requirements of 2 CFR 200.305 Federal Payment.
2. Equipment Management Requirements
Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e).
In addition, the organizations should ensure that existing written procedures are in compliance with:
a. General Procurement Standards
2 CFR 200.318 to 200.327 discusses that contracts must be established and managed in accordance with the procurement requirements in 2 CFR Part 200. Grantees must have written procurement policies and procedures that demonstrate a fair and reliable process, with standards of conduct addressing conflicts of interest, for obtaining grant-funded goods and services.
Condition
MARTA does not have comprehensive written policies and procedures concerning the following key compliance areas which are required by the Uniform Guidance:
Equipment and Real Property Management
MARTA has an Asset Inventory Policy and Procedures, however, it does not clearly define the policies and procedures that are in place for the use, management and disposition of equipment acquired under a Federal award in accordance with 2 CFR sections 200.313(c) through (e).
Cash Management
MARTA does not have written procedures to implement the requirements of 2 CFR 200.305 Federal Payment.
Procurement, Suspension and Debarment
MARTA has a Procurement policy, however, documented procedures are not well-defined regarding the purchase process for different types of procurement, obtaining quotations, bidding, and procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded.
Cause
MARTA’s reliance on informal business practices leads to inconsistencies in its internal controls.
Effect
The absence of formal policies and procedures in the key compliance areas could result in non-compliance with federal regulations, which may lead to unnecessary sanctions. Additionally, without formal written policies and procedures, it is difficult to ensure consistent practices across the organization.
Questioned Costs
None
Recommendation
MARTA should develop and implement formal written policies and procedures for the specific areas required by the Uniform Guidance. These policies and procedures must clearly delineate the requirements of the Uniform Guidance. Personnel responsible for these areas should receive adequate training and apply the policies effectively. Regular reviews should be conducted to update the policies and procedures as needed.
Views of Responsible Officials and Planned Corrective Action
MARTA has grown substantially in the last several years. This progress includes identifying areas that we need to update or to develop new processes and documentation.
MARTA has an Asset Inventory Policy and Procedures in which the purpose is to ensure that fixed assets are properly accounted for, identified, and tracked.
MARTA also has Cash Handling Policy and Procedures which addresses safeguarding public funds and maximizing resources available. This is designed to reduce the risks associated with the collection, receipts storage and reporting of cash transactions and to safeguard and maintain the security and integrity of MARTA's fiscal assets.
MARTA is in the process of updating the Procurement Policy.
MARTA will review and update these policies and/or create new policies to make sure that they are compliant with the Uniform Guidance. The updated or newly created policies will be brought to the October 2025 Board of Directors meeting for Board review or approval.
Personnel responsible: Sandy Benson, General Manager
Anticipated completion date: October 2025
Procurement, Suspension and Debarment
Criteria
Procurement
Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow specific procurement standards set out in 2 CFR sections 200.317 through 200.327, which includes documenting the procurement methods used for vendor selection. These procedures are designed to ensure fair competition, cost-effectiveness, and federal requirements.
These procurement standards require, among other provisions, that a non-federal entity must:
1. Meet the general procurement standards in 2 CFR Section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to reliable contractors, and maintaining records to document the history of procurement.
2. Conduct all procurement transactions for the acquisition of property or services under a federal award in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320.
3. Use documented procurement procedures, consistent with the standards of 2 CFR 200.317 to 320. 2 CFR 200.320 enumerates below the different procurement methods that a non-federal entity should use:
a) The micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $50,000.
b) Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold.
The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations.
c) Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)).
4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b) (1); the competitive proposals method under the conditions specified in 2 CFR section 200.320(b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)).
5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)).
6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.”
Suspension and Debarment
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 audit, MARTA was unable to provide purchase order documentation or contract for eight samples that are above $500. Per current procurement policy, “Purchases of supplies, services, and equipment costing more than five hundred ($500) shall be made by purchase order, unless authorized by a signed contract or Mountain Transit Board Approval”.
During our audit, MARTA was unable to provide supporting documentation to demonstrate that the required price or rate quotations for those purchases or contracts with contract amounts above $10,000 were obtained from an adequate number of qualified sources and maintained the documentation to support its conclusion. These were noted for two samples tested. The expenditure paid ranged from $10,000 to $36,000 in 2024.
During our audit, MARTA was unable to provide supporting documentation to demonstrate that the process of verifying if vendors are not suspended or debarred was performed on two vendors tested. The expenditure paid to these vendors ranged from $109,000 to $647,000 in 2024.
Cause
MARTA did not follow its existing purchasing policy and procedures, and lack of procedures in maintaining appropriate records of vendor selection and compliance with procurement standards.
Effect
The absence of procurement documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances or unnecessary sanctions.
Questioned Costs
None
Recommendation
MARTA should strengthen its internal controls over procurement by ensuring that all procurement activities, particularly significant expenditures, are properly documented. This includes retaining evidence that procurement methods required by the Uniform Guidance were followed, such as bids, contracts, or justifications for sole-source vendors. MARTA should also conduct training for staff involved in procurement to ensure awareness and adherence to the policies. Regular internal audits may be implemented to verify compliance with procurement procedures.
Views of Responsible Officials and Planned Corrective Action
MARTA is in the process of updating the Procurement Policy. MARTA will ensure that updated policies and procedures will be implemented to address compliance and documentation requirements for small and micro-purchases, sole-source, and informal processes.
The updated Procurement Policy will be brought to the October 2025 Board of Directors meeting for Board review or approval.
Personnel responsible: Sandy Benson, General Manager
Anticipated completion date: October 2025
Allowable costs – Payroll
Criteria
Except where otherwise authorized by statute, cost must meet the following general criteria in order to be allowable under federal awards;
1. Be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E.
2. Conform to any limitations or exclusions set forth in 2 CFR Part 200, Subpart E or in the federal award as to types or amount of cost items.
3. Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity.
4. Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost.
5. Be determined in accordance with generally accepted accounting principles (GAAP), except for state and local governments and Indian tribes only as otherwise provided for in 2 CFR Part 200.
6. Not be included as a cost or used to meet cost-sharing or matching requirements of any other federally financed program in either the current or a prior period.
7. Be adequately documented.
Condition
During the audit of payroll expenses charged to the program, it was noted that four samples have Personnel Action Forms (PAF) without the signature of the General Manager. Per current policies and procedures, for pay rate changes, a PAF should be created by the HR Manager and signed by the General Manager.
Additionally, MARTA was unable to provide PAF for four samples.
Cause
The PAFs without final signature were not submitted to the General Manager. There was also difficulty in finding the missing PAFs which might be due to a lack of proper file management.
Effect
The absence of approval and adequate documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances of costs.
Questioned Costs
None
Recommendation
MARTA should strengthen its internal controls over the payroll process by ensuring that all PAFs are reviewed for accuracy and properly approved. MARTA should ensure that PAF and timecards are adequately documented and filed.
Views of Responsible Officials and Planned Corrective Action
The HR Manager will review the procedures for processing PAF, communicate more effectively to close the loop on paperwork process, and confirm authorized signatures. The HR Manager will review all files for completed PAF forms and practice better diligence going forward in maintaining all documentation in personnel files.
Personnel responsible: Jacob Phillips, HR Manager
Anticipated completion date: Effective immediately
Develop Written Policies and Procedures
Criteria:
2 CFR 200.303 requires nonfederal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that organizations who manage the federal award:
• Understand and comply with the federal statutes, regulations, and terms and conditions of the award;
• Evaluate and monitor compliance;
• Take prompt action when instances of noncompliance is identified.
These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, the Uniform Guidance requires non-federal entities to develop written procedures related to the following areas:
1. Cash Management
2 CFR 200.302(b)(6) states that the financial management system of each non-Federal entity must provide for the written procedures to implement the requirements of 2 CFR 200.305 Federal Payment.
2. Equipment Management Requirements
Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e).
In addition, the organizations should ensure that existing written procedures are in compliance with:
a. General Procurement Standards
2 CFR 200.318 to 200.327 discusses that contracts must be established and managed in accordance with the procurement requirements in 2 CFR Part 200. Grantees must have written procurement policies and procedures that demonstrate a fair and reliable process, with standards of conduct addressing conflicts of interest, for obtaining grant-funded goods and services.
Condition
MARTA does not have comprehensive written policies and procedures concerning the following key compliance areas which are required by the Uniform Guidance:
Equipment and Real Property Management
MARTA has an Asset Inventory Policy and Procedures, however, it does not clearly define the policies and procedures that are in place for the use, management and disposition of equipment acquired under a Federal award in accordance with 2 CFR sections 200.313(c) through (e).
Cash Management
MARTA does not have written procedures to implement the requirements of 2 CFR 200.305 Federal Payment.
Procurement, Suspension and Debarment
MARTA has a Procurement policy, however, documented procedures are not well-defined regarding the purchase process for different types of procurement, obtaining quotations, bidding, and procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded.
Cause
MARTA’s reliance on informal business practices leads to inconsistencies in its internal controls.
Effect
The absence of formal policies and procedures in the key compliance areas could result in non-compliance with federal regulations, which may lead to unnecessary sanctions. Additionally, without formal written policies and procedures, it is difficult to ensure consistent practices across the organization.
Questioned Costs
None
Recommendation
MARTA should develop and implement formal written policies and procedures for the specific areas required by the Uniform Guidance. These policies and procedures must clearly delineate the requirements of the Uniform Guidance. Personnel responsible for these areas should receive adequate training and apply the policies effectively. Regular reviews should be conducted to update the policies and procedures as needed.
Views of Responsible Officials and Planned Corrective Action
MARTA has grown substantially in the last several years. This progress includes identifying areas that we need to update or to develop new processes and documentation.
MARTA has an Asset Inventory Policy and Procedures in which the purpose is to ensure that fixed assets are properly accounted for, identified, and tracked.
MARTA also has Cash Handling Policy and Procedures which addresses safeguarding public funds and maximizing resources available. This is designed to reduce the risks associated with the collection, receipts storage and reporting of cash transactions and to safeguard and maintain the security and integrity of MARTA's fiscal assets.
MARTA is in the process of updating the Procurement Policy.
MARTA will review and update these policies and/or create new policies to make sure that they are compliant with the Uniform Guidance. The updated or newly created policies will be brought to the October 2025 Board of Directors meeting for Board review or approval.
Personnel responsible: Sandy Benson, General Manager
Anticipated completion date: October 2025
Procurement, Suspension and Debarment
Criteria
Procurement
Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow specific procurement standards set out in 2 CFR sections 200.317 through 200.327, which includes documenting the procurement methods used for vendor selection. These procedures are designed to ensure fair competition, cost-effectiveness, and federal requirements.
These procurement standards require, among other provisions, that a non-federal entity must:
1. Meet the general procurement standards in 2 CFR Section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to reliable contractors, and maintaining records to document the history of procurement.
2. Conduct all procurement transactions for the acquisition of property or services under a federal award in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320.
3. Use documented procurement procedures, consistent with the standards of 2 CFR 200.317 to 320. 2 CFR 200.320 enumerates below the different procurement methods that a non-federal entity should use:
a) The micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $50,000.
b) Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold.
The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations.
c) Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)).
4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b) (1); the competitive proposals method under the conditions specified in 2 CFR section 200.320(b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)).
5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)).
6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.”
Suspension and Debarment
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 audit, MARTA was unable to provide purchase order documentation or contract for eight samples that are above $500. Per current procurement policy, “Purchases of supplies, services, and equipment costing more than five hundred ($500) shall be made by purchase order, unless authorized by a signed contract or Mountain Transit Board Approval”.
During our audit, MARTA was unable to provide supporting documentation to demonstrate that the required price or rate quotations for those purchases or contracts with contract amounts above $10,000 were obtained from an adequate number of qualified sources and maintained the documentation to support its conclusion. These were noted for two samples tested. The expenditure paid ranged from $10,000 to $36,000 in 2024.
During our audit, MARTA was unable to provide supporting documentation to demonstrate that the process of verifying if vendors are not suspended or debarred was performed on two vendors tested. The expenditure paid to these vendors ranged from $109,000 to $647,000 in 2024.
Cause
MARTA did not follow its existing purchasing policy and procedures, and lack of procedures in maintaining appropriate records of vendor selection and compliance with procurement standards.
Effect
The absence of procurement documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances or unnecessary sanctions.
Questioned Costs
None
Recommendation
MARTA should strengthen its internal controls over procurement by ensuring that all procurement activities, particularly significant expenditures, are properly documented. This includes retaining evidence that procurement methods required by the Uniform Guidance were followed, such as bids, contracts, or justifications for sole-source vendors. MARTA should also conduct training for staff involved in procurement to ensure awareness and adherence to the policies. Regular internal audits may be implemented to verify compliance with procurement procedures.
Views of Responsible Officials and Planned Corrective Action
MARTA is in the process of updating the Procurement Policy. MARTA will ensure that updated policies and procedures will be implemented to address compliance and documentation requirements for small and micro-purchases, sole-source, and informal processes.
The updated Procurement Policy will be brought to the October 2025 Board of Directors meeting for Board review or approval.
Personnel responsible: Sandy Benson, General Manager
Anticipated completion date: October 2025
Allowable costs – Payroll
Criteria
Except where otherwise authorized by statute, cost must meet the following general criteria in order to be allowable under federal awards;
1. Be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E.
2. Conform to any limitations or exclusions set forth in 2 CFR Part 200, Subpart E or in the federal award as to types or amount of cost items.
3. Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity.
4. Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost.
5. Be determined in accordance with generally accepted accounting principles (GAAP), except for state and local governments and Indian tribes only as otherwise provided for in 2 CFR Part 200.
6. Not be included as a cost or used to meet cost-sharing or matching requirements of any other federally financed program in either the current or a prior period.
7. Be adequately documented.
Condition
During the audit of payroll expenses charged to the program, it was noted that four samples have Personnel Action Forms (PAF) without the signature of the General Manager. Per current policies and procedures, for pay rate changes, a PAF should be created by the HR Manager and signed by the General Manager.
Additionally, MARTA was unable to provide PAF for four samples.
Cause
The PAFs without final signature were not submitted to the General Manager. There was also difficulty in finding the missing PAFs which might be due to a lack of proper file management.
Effect
The absence of approval and adequate documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances of costs.
Questioned Costs
None
Recommendation
MARTA should strengthen its internal controls over the payroll process by ensuring that all PAFs are reviewed for accuracy and properly approved. MARTA should ensure that PAF and timecards are adequately documented and filed.
Views of Responsible Officials and Planned Corrective Action
The HR Manager will review the procedures for processing PAF, communicate more effectively to close the loop on paperwork process, and confirm authorized signatures. The HR Manager will review all files for completed PAF forms and practice better diligence going forward in maintaining all documentation in personnel files.
Personnel responsible: Jacob Phillips, HR Manager
Anticipated completion date: Effective immediately