Audit 401557

SUSPENSION AND DEBARMENT Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Assistance Listing Number: 20.205 Federal Award Identification Number and Year: CRP 8824 (185) - 2024 Pass-Through Agency: Minnesota Department of Transportation Pass-Through Number(s): CRP 8824 (185) Award Period: Yead-Ended December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters 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 County must verify that the vendor is not suspended, debarred, or otherwise excluded from participating in the transaction. Condition: During our testing, we noted although the County had adequate internal controls designed to ensure vendors were not suspended or debarred, the County did not implement their controls for one of two contracts tested. Questioned costs: None Context: During our testing, it was noted that one out of the two contracts tested did not have the vendor’s suspension and debarment status documented prior to entering into the contract. Cause: Although the County has controls in place around suspension and debarment, the controls were not implemented properly on one of two contracts due to the nature of the vendor and management oversight. The noncompliance occurred in connection with an infrequent, non-routine transaction that fell outside the County’s typical purchasing processes. Effect: The County could have entered into an agreement with a vendor that was suspended or debarred. Although the County 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: Not applicable. Recommendation: We recommend the County design controls to ensure an adequate review process is in place to review potential vendors to determine they are not suspended or debarred prior to entering into transactions with vendors. Views of responsible officials: There is no disagreement with the audit finding.