Audit 359367

Assistance Listing Number, Federal Agency, and Program Name ALN 21.027, United States Department of the Treasury COVID 19 Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year SLFRP0127, 2021 Pass through Entity Michigan Department of Environment, Great Lakes, and Energy Finding Type Material weakness Repeat Finding No Criteria In accordance with 2 CFR § 180.300, nonfederal entities are required to verify that external parties are not suspended or debarred from participating in federal programs before entering into a covered transaction. This requirement can be satisfied by conducting an exclusions search on SAM.gov, obtaining a certification from the contracted entity, or including a clause in the agreement that ensures compliance with nonexclusion requirements. Condition The Authority did not retain documentation to demonstrate that the Authority checked for suspension and debarment prior to entering into the contract. Questioned Costs None If Questioned Costs are not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported Not applicable Identification of How Questioned Costs Were Computed Not applicable Context We tested two contracts for compliance with this requirement. For one of the contracts tested, we noted that the Authority did not retain the proper documentation to demonstrate that the requirement was performed prior to entering into the contract. Subsequently, the Authority performed the check and noted the contractors were not suspended or debarred, therefore, creating no questioned costs. Cause and Effect The Authority utilized an existing contractor to perform procurement, suspension and debarment activities related to a separately procured contractor; however, it did not have controls in place to monitor that activity was appropriately documented. Recommendation We recommend that the Authority incorporate controls to obtain and retain documentation of the suspension and debarment check prior to entering into contracts. Views of Responsible Officials and Corrective Action Plan DUWA agrees with this comment. Agreements will be reviewed by the system manager and accountant for all appropriate documentation according to the federal award guidelines prior to board approval. In the event that a consultant is used for oversight of the project, the guidelines will be provided in advance of the notice of bid and included in the bid documents.

Assistance Listing Number, Federal Agency, and Program Name ALN 21.027, United States Department of the Treasury COVID 19 Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year SLFRP0127, 2021 Pass through Entity Michigan Department of Environment, Great Lakes, and Energy Finding Type Material weakness Repeat Finding No Criteria In accordance with 2 CFR § 180.300, nonfederal entities are required to verify that external parties are not suspended or debarred from participating in federal programs before entering into a covered transaction. This requirement can be satisfied by conducting an exclusions search on SAM.gov, obtaining a certification from the contracted entity, or including a clause in the agreement that ensures compliance with nonexclusion requirements. Condition The Authority did not retain documentation to demonstrate that the Authority checked for suspension and debarment prior to entering into the contract. Questioned Costs None If Questioned Costs are not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported Not applicable Identification of How Questioned Costs Were Computed Not applicable Context We tested two contracts for compliance with this requirement. For one of the contracts tested, we noted that the Authority did not retain the proper documentation to demonstrate that the requirement was performed prior to entering into the contract. Subsequently, the Authority performed the check and noted the contractors were not suspended or debarred, therefore, creating no questioned costs. Cause and Effect The Authority utilized an existing contractor to perform procurement, suspension and debarment activities related to a separately procured contractor; however, it did not have controls in place to monitor that activity was appropriately documented. Recommendation We recommend that the Authority incorporate controls to obtain and retain documentation of the suspension and debarment check prior to entering into contracts. Views of Responsible Officials and Corrective Action Plan DUWA agrees with this comment. Agreements will be reviewed by the system manager and accountant for all appropriate documentation according to the federal award guidelines prior to board approval. In the event that a consultant is used for oversight of the project, the guidelines will be provided in advance of the notice of bid and included in the bid documents.