Audit 371042

2024 – 004 Procurement, Suspension and Debarment Federal Agency: U.S. Department of the Interior Federal Program Name: Outdoor Recreation Acquisition, Development, and Planning Assistance Listing Number: 15.916 Federal Award Identification Number and Year: P23AP01170 - 2023 Pass-Through Agency: Wisconsin Department of Natural Resources Pass-Through Number(s): 55-01943 Award Period: September 1, 2023 – September 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria or specific requirement: 2 CFR 200.318 requires grant recipients and subrecipients to have documented procurement procedures. These documented procedures must be consistent with the regulations and standards identified in Section 200.317-200.327. The grant recipient or subrecipient must also maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. No employee, officer, agent, or board member with a real or apparent conflict of interest may participate in the selection, award, or administration of a contract supported by the Federal award. Criteria or specific requirement (continued): 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: The City has established a simplified acquisition threshold for public construction but not for "nonpublic works items". The current policy only requires three or more quotes for all other purchases other than the public construction purchases but with no established threshold. The City entered into procurement transactions that exceeded the covered transaction threshold and did not maintain documentation of a search for suspension and debarment nor did it receive a certification from the entity or include a clause regarding suspension and debarment status in the contract with the entity in accordance with 2 CFR section 180.220. Questioned costs: None Context: The City’s current financial policies lack the necessary requirements related to procurement of items other than construction over the simplified acquisition threshold. Supporting documentation of the search for suspension and debarment was requested for the four procurement transactions that exceeded the covered transaction threshold in 2024. No deviations were expected. The city had no support or documentation for suspension and debarment status for these transactions. Cause: The city does not receive frequent federal awards at a level which triggers needing a single audit and was unfamiliar with documentation requirements surrounding procurement procedures. The City did not adopt or modify policies and implement internal controls to address the procurement, conflict of interest and suspension and debarment requirements of the Uniform Guidance. Effect: Contracts for non-construction related procurements and those over the simplified acquisition threshold may not be in compliance with the Uniform Guidance. The potential exists that the city could award contracts to vendors who are suspended or debarred by the federal government resulting in noncompliance. Repeat Finding: No Recommendation: City personnel should familiarize themselves with the documentation requirements of the CFR related to procurement. City policies and procedures should be modified to help ensure documentation is maintained on all compliance requirements. The written policies should be expanded to clearly address all five procurement methods allowed under Uniform Guidance. The city should also adopt a written conflict of interest policy. We also recommend that the City review and update policies and procedures to help ensure that all federal grants with covered transactions have vendors reviewed for suspension and debarment status prior to entering into the transaction and that documentation of the status is maintained with the procurement history of each transaction that it is required for. Views of responsible officials: There is no disagreement with the audit finding.