Audit 414923

Federal Program: Coronavirus State and Local Fiscal Recovery Funds COVID-19 Award Listing Number: 21.027 Federal Agency: Department of Treasury Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness in Internal Control Over Compliance Questioned Costs: None identified Criteria In accordance with 2 CFR §§ 180.300, 180.320, and 200.214, non-federal entities may not enter into covered transactions with parties that are suspended or debarred from participating in federal programs. Prior to awarding a covered contract, recipients and subrecipients must verify that the vendor is not suspended or debarred by reviewing SAM.gov, obtaining a certification from the vendor, or including an appropriate clause in the contract. Documentation supporting the verification performed should be retained to demonstrate compliance with federal requirements. Condition During testing of procurement transactions charged to the Coronavirus State and Local Fiscal Recovery Funds program, the auditee was unable to provide documentation demonstrating that suspension and debarment verification procedures were performed prior to contract award. Management indicated that staff routinely verified vendor eligibility through SAM.gov; however, evidence of the searches was not retained in the procurement files. As part of audit procedures, the auditors subsequently performed SAM.gov searches for the vendors tested and noted that none were suspended or debarred. Context Four (4) of four (4) covered transactions tested did not contain documentation supporting the completion of suspension and debarment verification procedures. The sample was not and was not intended to be, a statistically valid sample. Cause The auditee's procurement policies and procedures were not followed, which required documentation supporting suspension and debarment verification activities. In addition, management's review controls were not designed to ensure that evidence of compliance was maintained within the procurement file. Effect The lack of retained documentation increases the risk that contracts funded with federal awards could be awarded to suspended or debarred vendors and prevents the auditee from demonstrating compliance with Uniform Guidance procurement requirements. Federal procurement guidance emphasizes verifying vendor eligibility through SAM.gov or other allowable methods. Identification as a repeat finding Not a repeat finding Recommendation We recommend that management revise procurement policies and procedures to require the retention of documentation supporting suspension and debarment verification for all covered transactions, including: • Vendor name searched • Date of search • Search results • Evidence of review and approval Management should also implement a monitoring control to ensure required documentation is maintained before contract award and retained in the procurement file. Views of Responsible Officials See Corrective Action Plan letter.