Audit 411917

Finding Number: 2025-002 - Suspension and Debarment Criteria: Required by 2 CFR, Part 200 for federally funded programs, when an institution enters into a covered transaction with an entity or individual, the institution must verify that the vendor and/or employee is not suspended or debarred or otherwise excluded from participating in federal programs. Generally, a covered transaction is a transaction expected to equal or exceed $25,000 and be funded with federal dollars. This verification may be accomplished by checking the System for Award Management (SAM), or by adding a clause or condition to the covered transaction. Condition Found: During our audit, we noted that management did not review the SAM for vendors or employees meeting the covered transaction threshold. Context: We noted none of the vendors or employees exceeding $25,000 funded by the program were checked for suspension or debarment. Based on our testing, none of the vendors or employees exceeding the $25,000 limit were included in the SAM and received payments funded by the District's major program. Questioned Costs: None. Cause and Effect: The District was aware of the requirement to verify vendors and employees but they do not have a process established as part of their monthly, quarterly, or year-end close process. Since there is no process in place, there is a greater risk of vendors and employees that are included on the SAM being disbursed funds through federal funds. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend that the District implements a process on a quarterly or annual basis for checking vendors and employees against the SAM and maintain documentation that the check has been performed. Management response: Management agrees with the findings and recommendations.