Audit 415709

Finding No. 2024-003 — Suspension and Debarment Federal Agency: U.S. Department of Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Fund Federal Assistance Listing Number: 21.027 Award Period: March 3, 2021 through December 31, 2026 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matter Condition: The City did not retain documentation verifying vendors were not suspended or debarred prior to entering into covered transactions. Criteria: The Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to verify vendors are not suspended or debarred by checking the SAM.gov exclusions list, obtaining a certification from the vendor, or including a clause or condition in the covered transaction with the vendor. Documentation evidencing such verification should be retained. Questioned Costs: None. Context: The City lacked documentation of suspension and debarment verifications for 5 of 5 vendors tested. Effect: Without documented verification of suspension and debarment status, there is an increased risk of contracting with excluded parties, which could result in noncompliance with federal requirements and potential repayment obligations. Cause: The City does not have a formal process in place to ensure that documentation evidencing suspension and debarment verification is retained prior to entering into covered transactions. Repeat Finding: Finding was not repeated in the prior year. Recommendation: We recommend the City design and implement internal controls to ensure they are retaining documentation of checking suspension and debarment status for vendors prior to entering into contracts. Views of Responsible Officials: Management will meet with the grant Program Manager(s) to review and ensure all the City's Federal Grants Management Policies are being adhered to.