Audit 394801

2025 – 002 Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: H79TI083313 - 2020 Award Period: March 3, 2021 through December 31, 2026 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. Non-federal entities are prohibited from contracting with or making subawards under covered transactions that are suspended or debarred. Before entering into a covered transaction, the entity must verify that the contractor is not suspended, debarred, or otherwise excluded from participating in the transaction. Condition: During our testing, we noted the City did not have adequate internal controls designed to ensure vendors were not suspended or debarred. The City did not retain documentation that the suspension and debarment status of contractors were verified prior to entering into the contract. Questioned costs: None Context: During our testing, it was noted that for one out of the five items the City successfully completed the suspension and debarment check as required by the uniform guidance. However, during the review, it was found that the city did not retain the documentation supporting the date when the check was performed. Cause: The City’s controls were not sufficient to ensure that contractors’ suspension and debarment status was documented prior to entering into the contract. Effect: The City could have entered into an agreement with a contractor that was suspended or debarred. Although the City was able to demonstrate that contracts were not entered into with vendors who were suspended or debarred, the absence of documentation performed prior to contract execution presents a risk of noncompliance with applicable procurement regulations. Repeat Finding: No. Recommendation: We recommend the City design controls to ensure an adequate review process is in place to review potential contractors to determine they are not suspended or debarred prior to entering into transactions with contractors. Views of responsible officials: There is no disagreement with the audit finding.