Audit 414585

2025-007 – Procurement, Suspension and Debarment (Repeat Finding) Finding Type. Immaterial Noncompliance/Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment). Program. Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; ALN 21.027; Award Numbers DW-7731A, DW-7640A, and DW-7686A. Criteria. A recipient of federal awards is required to determine that vendors being paid with federal funds are not suspended or debarred from doing business with the City. Such procedures are required whenever the amount disbursed to a single vendor in a given year is expected to be at least $25,000. Condition. The City did not verify that any of their vendors with purchases over $25,000 were not suspended or debarred from doing business with the City, or did not retain documentation to evidence that this verification had taken place. Cause. This condition was caused by management oversight in knowing the federal compliance requirements of the grant. Effect. As a result of this condition, the City was exposed to the risk that disbursements of federal awards would be made to vendors suspended or debarred by the federal government. Questioned Costs. No costs have been questioned as a result of this finding, inasmuch as no suspended or debarred transactions were noted. Recommendation. We recommend that the City verify that all of their vendors over $25,000 spent with federal funds were not suspended or debarred, and retain documentation to this verification. View of Responsible Officials. The City agrees with the audit finding. A corrective action plan has been prepared.

2025-008 – Written Policies and Procedures Required by the Uniform Grant Guidance (Repeat Finding) Finding Type. Immaterial Noncompliance/Significant Deficiency in Internal Control over Compliance (Allowable Costs/Cost Principles, Cash Management, and Procurement, Suspension and Debarment) Program. Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; ALN 21.027; Award Numbers DW-7731A, DW-7640A, and DW-7686A. Criteria. The Uniform Guidance requires a non-federal entity that has expended federal awards for a grant awarded on or after December 26, 2014 to have written policies pertaining to various areas, including: 1) Payments (draws of federal funds and how to minimize the time elapsing between the receipt of federal funds and the disbursement to contractors/employees/subrecipients) (§200.302 (6)); 2) Procurement (including bidding and a conflict of interest policy) (§200.318); 3) Allowability of costs charged to federal programs (§200.302 (7)); 4) Compensation (personnel and benefits policy) (§200.430 and §200.431); and 5) Travel costs (including mileage and per diem) (§200.474). Condition. Although the City has processes in place to cover these areas and draft policies have been developed, there are no formal written policies that address all of the areas required by the Uniform Guidance. Cause. This condition appears to be the result of a time lag in identifying the requirement and developing a plan for compliance. Effect. As a result of this condition, the City did not fully comply with the Uniform Guidance applicable to the above noted grants. Questioned Costs. No costs were required to be questioned as a result of this finding inasmuch as our testing did not reveal any unallowed costs or excess cash draws. Recommendation. We recommend that the City review and approve the draft policies as soon as practical. View of Responsible Officials. The City agrees with the audit finding. A corrective action plan has been prepared.