Audit 370446

SA2024-001: Lack of Documentation for Suspension or Debarment Verification Criteria Per 2 CFR section 180.300, 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 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 (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. Condition The City failed to provide evidence demonstrating the verification of vendor’s eligibility before entering into a procurement contract. Cause The absence of documented proof regarding the verification of vendor’s eligibility for participation in the transaction is attributed to inadequate record-keeping practices rather than a failure to conduct the verification process. It appears that while the verification may have been conducted, the City did not retain sufficient documentation to demonstrate compliance with the requirement. Effect Without proper documentation, the City's procurement process lacks transparency and accountability, leading to challenges in demonstrating compliance with federal regulations. Recommendation The City should enhance its record-keeping practices to ensure that documentation of suspension or debarment verification is consistently maintained for all procurement transactions. Management Response The City has taken action by updating the procedures to now include a requirement for attaching the suspension and debarment verifications as part of the documentation process.