Audit 413684

Federal Agency: Federal Program Title: ALN: Pass-Through Agency: Pass-Through Number: Award Period: U.S. Department of Treasury COVID-19 Coronavirus State and Local Fiscal Recovery Funds 21.027 Texas Department of Emergency Management #1505-0271 March 3, 2021 – December 31, 2026 Type of Finding: Material Weakness in Internal Control Over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), the City of Manor, Texas 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.214, recipients and subrecipients are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Per 2 CFR 180.505 – Who uses SAM.gov Exclusions? (a) Federal agency officials use SAM.gov Exclusions to determine whether to enter into a transaction with a person, as required under § 180.430 (b) Participants also may, but are not required to, use SAM.gov Exclusions to determine if: (1) Principals of their transactions are excluded or disqualified, as required under § 180.320; or (2) Persons with whom they are entering into covered transactions at the next lower tier are excluded or disqualified. (c) TheSAM.gov Exclusions are available to the general public. Condition: For one procurement, qualification reference checks were performed for a contractor, however, a suspension and debarment check was not checked with SAM.gov. Questioned costs: None Context: See “Condition.” Cause: Individuals performing the vendor compliance checks were not adequately trained on the requirements that must be adhered to per federal guidelines. Effect: Failure to complete proper vendor compliance checks prior to entering into a covered transaction may lead to entering into contracts with suspended or disbarred vendors that could result in noncompliance and questioned costs. Repeat Finding: No Recommendation: We recommend that the City provide additional training to individuals performing vendor compliance checks. We also recommend the City establish internal controls to monitor that vendor compliance checks are being completed accurately and timely. Views of responsible officials: See management response on corrective action plan.