Audit 407749

Type of Finding – Material Weakness in Internal Control Over Compliance, Other Matters Federal Agency – U.S. Department of the Treasury Federal Program – COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), ALN No. 21.027 Compliance Requirement – Suspension and Debarment Repeat Finding – Yes Condition – During our testing of 5 covered transactions, we noted that management was not able to provide supporting documentation that suspension and debarment procedures were performed prior to the start of the procurement contract. Questioned Costs – None Context – For the five transactions tested for suspension and debarment, management was not able to provide the required supporting documentation showing that the suspension and debarment check was completed. Criteria – 2 CFR 180.300 prohibits entities from contracting under covered transactions to parties that are suspended or debarred from doing business with the federal government. A contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $ 25,000. In order to comply with federal suspension and debarment requirements, the City can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. Cause – There was significant turnover within the finance department of the City and grants administration was missing supervision by key personnel. The finding indicates that there could be some process improvements in how contracts are reviewed, documented and maintained to provide evidence the compliance requirements are being met. Effect – The City could enter into a federally-funded contract with a suspended or debarred party. Recommendation – We recommend that the City either obtain certifications from vendors and beneficiaries stating their organization is not suspended, debarred, or otherwise excluded from participation in federal assistance programs or document the procedures performed to verify the vendor or beneficiary is not identified as suspended or debarred on the SAM website. We recommend that the City has proper procedures in place to ensure that all contractual documentation is maintained and able to be located.