Audit 370568

Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Federal Agency: U.S. Department of the Treasury Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), ALN No. 21.027 Compliance Requirement: Suspension and Debarment Repeat Finding: No Condition: During our testing of two covered transactions, we noted that management was not able to provide supporting documentation that suspension and debarment procedures were performed prior to the start of the procurement contracts. Questioned Costs: None Context: Both vendors tested, in the population of two, for suspension and debarment, management was not able to provide the required supporting documentation showing that the suspension and debarment check was completed. Criteria: 2 CFR 180.300 prohibits entities from contracting under covered transactions to parties that are suspended or debarred from doing business with the federal government. A contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. In order to comply with federal suspension and debarment requirements, the City can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. Cause: There was a lack of personnel within the finance department of the City and grants administration was missing supervision by key personnel. The finding indicates that there should be process improvements in how contracts are reviewed, documented and maintained to provide evidence the compliance requirements are being met. Effect: The City could enter into a federally-funded contract with a suspended or debarred party. Recommendation: We recommend that the City either obtain certifications from vendors and beneficiaries stating their organization is not suspended, debarred, or otherwise excluded from participation in federal assistance programs or document the procedures performed to verify the vendor or beneficiary is not identified as suspended or debarred on the SAM website. We recommend that the City has proper procedures in place to ensure that all contractual documentation is maintained and able to be located.

Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Federal Agency: U.S. Department of the Treasury Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), ALN No. 21.027 Compliance Requirement: Procurement Repeat Finding: No Condition: During our testing of one covered transaction, we noted that management was not able to provide supporting documentation that procurement procedures were performed prior to the start of the procurement contracts including the reason for the vendor being considered a sole-source vendor. Questioned Costs: None Context: For one of two vendors tested, in the population of two, for procurement, management was not able to provide the required supporting documentation showing that the procurement policy was followed. The City confirmed that they deemed the covered transaction as a sole source procurement activity, however, did not keep documentation supporting that analysis. Criteria: Per 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements (Uniform Guidance), Section 200.318 General Procurement Standards, the non-Federal entity must maintain records sufficient to detail the history of procurement and this procurement activity must be supported with a procurement policy. These records will include but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Cause: There was a lack of personnel within the finance department of the City and grants administration was missing supervision by key personnel. Effect: The finding indicates that there should be process improvements in how the procurement policy is followed and tracked throughout the procurement process to provide evidence the compliance requirements are being met. Recommendation: We understand that the City has a procurement policy in place; however, we recommend that the City has procedures in place to ensure that all procurement and contractual documentation is maintained and able to be located.