Audit 392321

2025-001 - Procurement, Suspension, and Debarment Finding Type. Immaterial Noncompliance (Procurement, Suspension, and Debarment) Program. Federal Transit Cluster; Assistance Listing Number 20.507 and 20.526; All Award Numbers. Criteria. Recipients of federal awards are required to follow their own internal purchasing policies, as well as comply with purchasing standards set forth in the Uniform Guidance. Under the requirements of 2 CFR Part 180 covered transactions for procurement and nonprocurement contracts that are expected to equal or exceed $25,000, the grantee must verify that the party being awarded a procurement and nonprocurement contract is not suspended, debarred, or otherwise excluded by checking the list of excluded parties, obtaining certification from the vendor or subrecipient, or including a clause or condition to the covered transaction with that entity before entering into a contract. Condition. The Authority was unable to provide documentation to support its consideration of suspension and debarment requirements for four out of ten vendors selected for testing. Cause. Management has indicated that the Authority is conducting proper procurement processes and checking for suspension and debarment during the initial bidding process however, was unable to provide documentation that the verification was completed and retained in accordance with federal requirements. Effect. The Authority is exposed to an increased risk that future noncompliance could occur and not be prevented or detected by the Authority's internal controls. Questioned Costs. No costs were required to be questioned as a result of this finding inasmuch as our testing did not reveal any unallowed costs, and the vendors in question were not actually suspended or debarred. Recommendation. We recommend that the Authority complete a search on sam.gov and document the results of that search in the vendor file or require the vendor to sign a certification that they are neither suspended nor debarred as part of new contracts for covered transactions to determine if a particular vendor has any active exclusions from participating in federal award programs during the initial bidding process, as required of the Uniform Guidance, and again on an annual basis for best practice. View of Responsible Officials. The Authority will take the following corrective action steps 1) update procurement policies to require verification of vendors through SAM.gov prior to contract award and annually thereafter for vendors expected to receive payments exceeding $25,000 in federal funds; 2) require a printed or electronically saved SAM.gov search result showing date of verification to be retained in the vendor file (electronic or hard copy); 3) develop and maintain an annual review schedule to re-verify suspension and debarment status for all applicable vendors and document completion; 4) provide training to procurement and finance staff regarding Uniform Guidance requirements for suspension and debarment compliance and documentation standards; and 5) incorporate suspension and debarment verification into the internal compliance checklist used during year-end federal reporting and Single Audit preparation. All corrective actions will be fully implemented no later than April 30, 2026, with ongoing monitoring procedures in place thereafter.