Audit 410286

Federal Agency: U.S. Department of Agriculture Federal Program Name: Rural Energy Savings Program Assistance Listing Number: 10.751 Federal Award Identification Number (FAIN) and Year: 2023; FAIN not available. Award Period: October 1, 2024 through Performance Obligations Fulfilled Compliance Requirement: Suspension and Debarment Type of Finding: Material weakness in internal control over compliance Criteria or Specific Requirement: When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR Part 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR Part 180.300). 2 CFR Part 200.303 indicates that non-Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The Vermont Bond Bank did not obtain evidence verifying entities were not suspended, debarred, or otherwise excluded from participating in the grant award transactions. Questioned Costs: None. Context: Three (3) of three (3) transactions tested for compliance with suspension and debarment requirements lacked evidence that required verification procedures had been performed. Cause: Procedures were not implemented to maintain documentation to support compliance with the standards of procurement, suspension and debarment contained in 2 CFR Part 180 and 2 CFR Part 200. Effect: Compliance with the requirements of the federal award could not be demonstrated. Repeat Finding: No. Recommendation: We recommend management enhance procedures and controls to ensure documentation is maintained to support all suspension and debarment verifications related to expenditures from federal award programs. Such documentation should be consolidated and maintained in a secure, accessible location. Views of Responsible Officials: Management agrees with the finding.