Audit 405887

Procurement Criteria: Under the Uniform Guidance (2 CFR 200.214 and 2 CFR Part 180), non-Federal entities are prohibited from entering into covered transactions with parties that are suspended, debarred, or otherwise excluded from participating in federal assistance programs. For covered transactions, the entity must verify that the vendor is not excluded or debarred. This verification must be done by: 1. Checking the System for Award Management (SAM.gov) exclusions list, 2. Collecting a certification from the entity, or 3. Adding a clause or condition to the covered transaction. Condition: During our testing of procurement transactions funded by the program, we selected a sample of one vendor with transactions exceeding the $25,000 threshold. For that vendor, the City could not provide documentation or evidence (such as a timestamped SAM.gov screenshot, signed certification, or contract clause) to prove that a suspension and debarment verification was performed prior to entering into the contract or awarding the funds. Cause: The City lacked adequate internal control procedures and oversight to ensure that documentation of the suspension and debarment verification process was systematically retained in the procurement files. Effects: The Organization is in non-compliance with federal procurement and record retention guidelines. Without maintaining proper documentation, the Organization cannot demonstrate compliance, increasing the risk that federal funds could be awarded to an excluded or debarred party, which could lead to disallowed costs. Questioned Costs: None identified. Recommendation: We recommend that management update its procurement policies and internal control procedures to strictly enforce documentation requirements. Specifically: • Procurement personnel should perform a SAM.gov exclusion search before a contract is finalized or a purchase order is issued. • A PDF screenshot of the SAM.gov "Active/No Exclusions" result must be printed or saved digitally, dated, and appended directly to the vendor's procurement or contract file. • Management should implement a periodic review process to ensure all covered transaction files contain the required verification documentation before payments are authorized. Auditee’s Response: We concur with the finding and recommendations.