Audit 405715

Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Prior to entering into subawards and covered procurement contracts funded by federal awards, recipients must verify that contractors, subcontractors, and subrecipients are not suspended, debarred, or otherwise excluded from participating in federally funded projects. Per 2 CFR § 180.300, this verification must be completed prior to transaction execution and documented using one of three approved methods: reviewing the System for Award Management (SAM.gov) exclusions database, obtaining a signed compliance certification, or adding a formal suspension and debarment clause directly into the legally executed agreement. Condition: During the audit over suspension and debarment, we were not able to obtain documentation evidencing whether vendors were checked against the SAM database or whether suspension and debarment certifications were obtained prior to awarding the contracts. Cause: While formal policies and procedures have been created by the City, they were not being consistently monitored or enforced during Fiscal Year 2025 to ensure required suspension and debarment verifications and supporting documentation were obtained and retained prior to contract awards. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. No support was provided for 2 out of 2 Federal Transit Cluster vendors selected for testing to show suspension and debarment check was performed prior to awarding the contracts. Identification as a Repeat Finding, If Applicable: 2024-003. Recommendation: We recommend the City strengthen its monitoring procedures over suspension and debarment compliance to ensure vendors are verified against the SAM database or that required suspension and debarment certifications are obtained prior to contract award. In addition, the City should ensure supporting documentation evidencing compliance is consistently maintained and retained in the procurement files in accordance with federal requirements and City policies. Views of Responsible Officials: The City implemented a new review, tracking and documentation process for all procurements during FY 2023-24. Staff were instructed to perform checks of all vendors -- regardless of the nature of the funding for the project – against SAM.GOV to check for disbarment. A PDF of the results for each vendor is saved in a project folder attached to each procurement. These files are stored on an internal network drive. During FY 2024-25, due to turnover in purchasing staff in Finance and transition of duties, there was a lapse in checking all procurements against SAM.GOV. This process has been reviewed with staff involved in procurement and regular checks are being conducted. Management feels this finding will be cleared in FY 2025-26.

Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Federal Financial Report (“FFR”) – The FFR must be submitted semi-annually throughout the period of performance, as well as in periods where no grant award activity occurs. The due date of each quarterly report is noted below: Programmatic Performance Report (“PPR”) – The PPR is required to be submitted semi-annually throughout the period of performance, as well as in periods where no grant award activity occurs. The due date of each quarterly report is noted below: Condition: We noted that the bi-annual FFR and PPR for SAFER were not submitted within the deadline, as shown below: Cause: Monitoring controls are inadequate to ensure the timely submission of the required reports. In addition, the SAFER grant was still relatively new to the City and staff were still becoming familiar with the related reporting requirements and deadlines during Fiscal Year 2024-25. Effect or Potential Effect: The City was not in compliance with the program’s reporting requirements. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2024-004. Recommendation: We recommend the City develop policy and procedures to ensure that the reports are prepared accurately and submitted timely. In addition, we recommend the City strengthen its monitoring controls and reporting procedures to ensure all required federal reports are prepared, reviewed, and submitted timely in accordance with grant requirements and reporting deadlines. The City should establish formal tracking procedures, including reporting calendars and supervisory review processes, to monitor due dates and submission status for each grant program. Views of Responsible Officials: Management endeavors to submit all required reports by required deadlines. The new Federal grant for the City’s Fire Department staffing (SAFER) are managed by the Fire Department. Prior staff charged with monitoring these grants failed to file the FFRs and PPRs in a timely manner – this was due to a number of factors, even though Finance staff endeavored to work with them to ensure reports were filed. This Fire Department staff person is no longer with the City and Finance looks to work more closely with the staff in the Fire Department charged with grant monitoring. Management will consider establishing formal tracking processes for all FFRs and PPRs, with deadline monitoring and supervisor review/sign-off.