Audit 400237

Criteria or specific requirement – Federal regulations require that grantees have controls in place to verify that vendors are not suspended or debarred prior to entering into contracts for goods and services exceeding $25,000. Condition – For five of the contracts tested, there was no evidence of verification from sam.gov being obtained to verify vendors were not suspended or debarred prior to conducting business. There was also no evidence in the City’s contract with the vendor that the appropriate language had been included. Context – Of the 17 vendors that had expenditures greater than $25,000, we selected seven vendors for procurement testing. Effect - The City could be transacting with parties that are suspended or debarred and may be subject to questioned costs or other sanctions from funding agencies. However, during the course of the audit we verified these vendors were not previously suspended or debarred. Cause - There were ineffective controls in place during the period, along with lack of management oversight. Repeat finding - No Recommendation - We recommend that before the City executes contracts with vendors that exceed $25,000, the vendor is compared to the listing of suspended and debarred vendors on the sam.gov website and that this verification is properly documented. Views of responsible officials –The City concurs with the auditor’s finding.