Audit 402404

2025-001: Lack of Documentation of Suspension/Debarment Testing at Time of Procurement Federal Department: Department of the Treasury Assistance Listing #: 21.027 Internal Controls Material Weakness & Noncompliance Category of Finding – Procurement, Suspension, and Debarment Criteria - In accordance with 2 CFR 200.214 and 2 CFR part 180, recipients of federal funds must not enter into covered transactions with parties that are suspended or debarred. The Uniform Guidance requires that entities verify the exclusion status of vendors or subrecipients by either (1) checking the System for Award Management (SAM) Exclusions list (https://sam.gov) prior to entering into a covered transaction, (2) Obtaining certifications from vendors or subrecipients that they are not suspended or debarred, if permitted under 2 CFR part 180, or (3) including appropriate suspension/debarment language in contracts and subawards to reflect responsibility not to award to excluded parties; and keeping documentation of this testing being performed before entering into those contracts. Condition - The Organization has a written policy requiring verification that vendors involved in covered procurement transactions under this program are not suspended or debarred, typically by including the required language in the contracts. For the project tested during the audit, management represented that suspension and debarment were performed prior to entering into agreements with vendors subject to this requirement as required. Context: The audit identified two vendors that were funded using these funds during the project and determined that neither contract included the suspension and disbarment language expected. During the audit, the auditor determined that the vendors were not listed as suspended or disbarred on sam.gov. Cause - The Organization typically includes the required suspension and debarment language in their contracts which are based on a template. Due to the ARPA and other unique funding sources of this project, the template contract was not used, and the suspension and debarment language was accidently not included in the alternative contract used. Effect – The Organization was noncompliance with the suspension and debarment requirement under Uniform Guidance. Though these specific vendors were not suspended and debarred, failing to test suspension and debarment prior to entering into contracts could lead to potentially contracting with disallowed vendors which could result in losing federal funding or being required to return funds Recommendation - We recommend that the Organization strengthen its internal controls over contracts as it relates to including the required suspension and debarment language. If that is not possible, we recommend the Organization institute alternative suspension and debarment testing procedures to ensure that all required vendors are tested prior to entering into a contract with a vendor. Auditee’s comments and response - Management plans to ensure, with all contracts, that the vendors sign a statement, either included in the contract or as a rider to the contract which confirms that they are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by a federal department or agency. Responsible party for corrective action: Nancy Cashman, Executive Director Repeat Finding: No