Audit 408114

Federal Agency: U.S. Department of Treasury; Federal Program Title: COVID-19 State and Local Fiscal Recovery Funds; Federal Assistance Listing No.: 21.027; Award Period: 2024; Pass-through Entity: n/a; Questioned Costs: $371,455; Compliance Requirement: (I) Suspension and Debarment. Criteria: Under Uniform Guidance (2 CFR 200.213) and Section I of Assistance Listing 21.027, recipients must verify that contractors and subrecipients are not suspended, debarred, or excluded before entering into covered transactions. SLFRF recipients are required to follow Treasury guidance and 31 CFR Part 19.300 for exclusions screening. Condition: During a review of procurement files for SLFRF-funded contracts, we noted that all contractors were engaged without any documentation that the County performed exclusion checks in SAM.gov or obtained suspension/debarment certifications. Cause: The County has not designed and implemented internal controls to ensure compliance with suspension and debarment requirements outlined. Additionally, the County did not include suspension and debarment verification in its procurement policies or standard review process for SLFRF-covered transactions under Listing 21.027. Effect: Failure to obtain the required certifications or perform verification procedures with SAM.gov could result in the payment of federal funds to vendors that are suspended or debarred from participation in federal assistance programs. This noncompliance may result in SLFRF funds being paid to ineligible parties, which could constitute improper expenditure and put the County and federal funding at risk. Recommendation: We recommend that the County immediately verify the suspension/debarment status of the three contractors using SAM.gov (or alternative methods); revise procurement policies to incorporate mandatory use of exclusion screening (e.g. SAM.gov) and signed certifications before contract award under SLFRF; train procurement and program staff on 2 CFR 200.213, 31 CFR Part 19, and Listing 21.027 suspension/debarment rules; and implement internal controls, such as periodic audits or checklists, to ensure ongoing compliance with suspension and debarment requirements in future covered transactions. Management's Response: Management concurs with the finding and commits to the following actions: all covered contractors will be checked in SAM.gov and any required recoveries will be addressed; procurement policy will be updated to require formal exclusion screening and certification for SLFRF-related contracts; procurement and program staff will receive training on suspension/debarment rules; and an annual compliance checklist will be implemented to confirm all future covered transactions include exclusion checks.