Audit 403119

Finding No.: 2025-001 Federal Agency: U.S. Department of Interior AL Program: Economic, Social, and Political Development of the Territories Award No.: D22AP00317 and D20AP00137 Area: Procurement, Suspension and Debarment Questioned Cost: $333,198 Criteria: 2 CFR § 200.214 requires non-federal entities to ensure that vendors are not suspended or debarred from participating in federal programs. This verification must be performed by:  Checking the System for Award Management (SAM) Exclusions list,  Obtaining a certification from the vendor, or  Including a clause or condition in the transaction that the vendor is not suspended or debarred. Condition: During testing of 8 procurement transactions, we noted that GWA did not perform or document suspension and debarment verification for 2 vendors. The total disbursements associated with these vendors amounted to $333,198. Cause: GWA did not consistently implement procedures or controls to ensure that suspension and debarment checks are performed and documented for all applicable vendors. Effect or Potential Effect: Failure to perform and document suspension and debarment verification increases the risk that GWA may contract with vendors that are ineligible to receive federal funds, resulting in noncompliance with federal regulations and potential questioned costs. Recommendation: We recommend that GWA strengthen its procurement controls by implementing and enforcing procedures to ensure that suspension and debarment verification is performed and properly documented for all applicable vendors prior to contract award. This may include requiring SAM checks, maintaining evidence of verification, and providing periodic training to procurement personnel. Identification as a Repeat Finding: Not applicable. Views of Responsible Officials: GWA acknowledges inconsistent implementation of procedures that required suspension and debarment verifications for 2 of the 8 procurement transactions tested and concurs with the recommendation to strengthen its procurement controls to address this finding. During FY2025, GWA implemented corrective actions including an immediate directive issued in April 2025 to comply with updated procurement procedures formally approved in September 2025. These procedures included standardized checklists, required vendor certification forms and mandatory SAM.gov verification procedures for all federally funded procurements. Training was conducted to required personnel in October 2025 and subsequently expanded to a broader audience in December 2025. All related SOPs and guidance materials were also made available through the employee intranet. Management also directed staff to retrospectively perform and document SAM.gov verifications for certain procurements initiated prior to implementation of the revised procedures. However, due to procurement management and personnel transitions, the retrospective review was not fully completed for the sampled procurements. Subsequent checks confirmed that the vendors were not suspended or debarred. GWA will continue reinforcing monitoring procedures to ensure all required compliance documentation is timely completed and retained in the procurement files.

Finding No.: 2025-002 Federal Agency: U.S. Department of Interior AL Program: Economic, Social, and Political Development of the Territories Award No.: D22AP00317 Area: Equipment and Real Property Management Questioned Cost: $303,960 Criteria: 2 CFR § 200.313(d) requires non-federal entities to maintain accurate property records for equipment acquired with federal funds. Such records must include, at a minimum, a description of the property, serial number or other identification number, source of funding, acquisition date, cost, location, use and condition, and ultimate disposition data. Condition: We identified that 8 electric vehicles, with a total cost of $303,960, acquired during the fiscal year ended September 30, 2025, were not included in the federally funded fixed asset register. Cause: GWA did not consistently follow established procedures to ensure that all federally funded equipment acquisitions were recorded in the federally funded fixed asset register in a timely and complete manner. Effect or Potential Effect: Failure to maintain complete and accurate records for federally funded equipment increases the risk of noncompliance with federal regulations. It may also result in improper tracking, safeguarding, and reporting of assets, potentially leading to questioned costs and audit findings. Recommendation: We recommend that GWA strengthen its controls over equipment and real property management by implementing procedures to ensure that all federally funded asset acquisitions are promptly and accurately recorded in the Federally Funded Fixed Asset Register. Management should also perform periodic reconciliations between procurement records and the asset register and provide training to responsible personnel to ensure compliance with federal requirements. Identification as a Repeat Finding: Not applicable. Views of Responsible Officials: GWA concurs with the finding. The eight electric vehicles identified in the finding were properly procured, capitalized and recorded in the Authority’s main fixed asset register; however, due to an administrative oversight, the assets were not included in the federally funded fixed asset register during FY2025. Following discussions with personnel involved in the transaction processing and asset recording, GWA determined that established internal procedures were generally followed; however, due to staffing constraints at the time, the assets were not properly coded with the applicable federally funded identifier when added to the Authority’s main fixed asset register. As a result, the assets were inadvertently omitted from the federally funded fixed asset register. Management notes that the omission was limited to the federally funded fixed asset register and did not affect the existence, safeguarding or operational use of the assets. The vehicles were physically accounted for, supported by procurement and payment documentation and properly reflected in the Authority’s general accounting records.