Federal Agency: U.S. Department of the Treasury Federal Financial Assistance Listing: 21.027 Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control over Compliance, Instance of Non-compliance Criteria: General procurement standards 2 CFR 200.318 require the non-Federal entity to use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and standards identified in this part. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 2 CFR sections 200.317 through 200.326. Prior to entering into subawards and contracts with award funds, recipients must verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded pursuant to 2 CFR section 200.214. Condition: The following required procurement standards were not addressed in the City's policy: ? Conflict of interest, including disciplinary actions for failure to adhere (2 CFR 200.318) ? Avoid acquisition of duplicative items (2 CFR 200.318) ? Cost effective purchasing (2 CFR 200.318) ? Document retention (2 CFR 200.318) ? Provisions to ensure all solicitations (2 CFR 200.319): Incorporate clear and accurate descriptions of technical requirements, do not restrict competition, and identify all requirements which the offerors must fulfill and factors used in evaluation ? Disadvantaged Business Enterprise program (2 CFR 200.321) ? Recovered materials, if subject to EPA requirements (2 CFR 200.322) ? Contract price/types (2 CFR 200.323) ? Bonding requirements (2 CFR 200.325) ? Contract provisions (2 CFR 200.326) Additionally, we identified 3 instances in which the City did not verify the vendor was not suspended, debarred, or otherwise excluded before entering into a covered transaction rather, verification was performed after entering into the transaction. The City asserted that they verified the vendors were not suspended or debarred; however, no documentation of the procedure being performed prior to entering into the transaction was presented. Cause: The City?s did not ensure it?s written procedures identified all of the required federal procurement standards. Additionally, the City?s controls did not ensure the check for suspension and debarment was performed and documented prior to entering into covered transactions. Effect: The City?s documented procurement procedures do not conform to the procurement standards identified in 2 CFR sections 200. 318, 200.319, and 200.321 through 200.326. Additionally, the City did not comply with the requirements of 2 CFR 200.214. Questioned Costs: None reported. Context/Sampling: The condition noted above was identified during our procedures related to procurement, suspension, and debarment. A non-statistical sample of 4 expenditures out of a population of 12 vendors were selected for testing as a whole. Repeat Finding from Prior Year: No. Recommendation: We recommend the City modify and strengthen its policies and procedures to ensure that the required Uniform Guidance standards are addressed. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Federal Agency: U.S. Department of the Treasury Federal Financial Assistance Listing: 21.027 Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Reporting Type of Finding: Significant Deficiency, Instance of Noncompliance Criteria: Per 2 CFR 200.303, the non-Federal entity 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. This includes internal controls over maintaining records of the preparer and approver of required reports. 2 CFR 200.329(b) requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with program requirements. The City of Paramount (the City) must submit an Interim Report and quarterly Project and Expenditure Reports that contain costs incurred during the covered period. Critical information pertaining to both the Interim Report and the Project and Expenditure Reports includes: ? Obligations and Expenditures o Current period obligation o Cumulative obligation o Current period expenditure o Cumulative expenditure Critical information pertaining to the Project and Expenditure Reports specifically includes: ? Subawards ? Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the recipient that are greater than $50,000. For amounts less than $50,000, the recipient must report in the aggregate for these same categories of loans issued; contracts and grants awarded; transfers made to other government entities and direct payments made by the recipient. Additionally, per the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Compliance and Reporting Guidance, all recipients are required to submit Project and Expenditure Reports on a timely basis as summarized in the quarterly report timelines table of the guidance. Condition: We identified 4 instances in which the City did not retain evidence to document the individual approving the City?s required performance reports. Current obligations were reported inaccurately for the Quarter 1 and 2 Project and Expenditure Reports. Additionally, expenditure information was reported inaccurately for the Quarter 2 Project and Expenditure Report and the report was submitted past the required deadline. Further, $48,834 for the purchase of energy efficient lighting upgrades to City Hall were reported incorrectly under ?Public Health - Negative Economic Impact? instead of ?Revenue Replacement?. Cause: The City?s procedures did not include documentation to evidence the individual that approved the reports. The City?s procedures did not ensure the Quarter 2 Project and Expenditure Report was prepared in accordance with program requirements and on a timely basis. Effect: The City did not comply with the requirements of 2 CFR 200.303 and inaccurate information was reported to the federal awarding agency. Questioned Costs: None reported. Context/Sampling: The entire population of one Interim Report and three quarterly Project and Expenditure Reports submitted during the year were selected for testing. Repeat Finding from Prior Year: No. Recommendation: We recommend the City enhance internal controls to ensure Interim and Project and Expenditure Reports are prepared in accordance with program requirements. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Federal Agency: U.S. Department of the Treasury Federal Financial Assistance Listing: 21.027 Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control over Compliance, Instance of Non-compliance Criteria: General procurement standards 2 CFR 200.318 require the non-Federal entity to use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and standards identified in this part. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 2 CFR sections 200.317 through 200.326. Prior to entering into subawards and contracts with award funds, recipients must verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded pursuant to 2 CFR section 200.214. Condition: The following required procurement standards were not addressed in the City's policy: ? Conflict of interest, including disciplinary actions for failure to adhere (2 CFR 200.318) ? Avoid acquisition of duplicative items (2 CFR 200.318) ? Cost effective purchasing (2 CFR 200.318) ? Document retention (2 CFR 200.318) ? Provisions to ensure all solicitations (2 CFR 200.319): Incorporate clear and accurate descriptions of technical requirements, do not restrict competition, and identify all requirements which the offerors must fulfill and factors used in evaluation ? Disadvantaged Business Enterprise program (2 CFR 200.321) ? Recovered materials, if subject to EPA requirements (2 CFR 200.322) ? Contract price/types (2 CFR 200.323) ? Bonding requirements (2 CFR 200.325) ? Contract provisions (2 CFR 200.326) Additionally, we identified 3 instances in which the City did not verify the vendor was not suspended, debarred, or otherwise excluded before entering into a covered transaction rather, verification was performed after entering into the transaction. The City asserted that they verified the vendors were not suspended or debarred; however, no documentation of the procedure being performed prior to entering into the transaction was presented. Cause: The City?s did not ensure it?s written procedures identified all of the required federal procurement standards. Additionally, the City?s controls did not ensure the check for suspension and debarment was performed and documented prior to entering into covered transactions. Effect: The City?s documented procurement procedures do not conform to the procurement standards identified in 2 CFR sections 200. 318, 200.319, and 200.321 through 200.326. Additionally, the City did not comply with the requirements of 2 CFR 200.214. Questioned Costs: None reported. Context/Sampling: The condition noted above was identified during our procedures related to procurement, suspension, and debarment. A non-statistical sample of 4 expenditures out of a population of 12 vendors were selected for testing as a whole. Repeat Finding from Prior Year: No. Recommendation: We recommend the City modify and strengthen its policies and procedures to ensure that the required Uniform Guidance standards are addressed. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Federal Agency: U.S. Department of the Treasury Federal Financial Assistance Listing: 21.027 Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Reporting Type of Finding: Significant Deficiency, Instance of Noncompliance Criteria: Per 2 CFR 200.303, the non-Federal entity 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. This includes internal controls over maintaining records of the preparer and approver of required reports. 2 CFR 200.329(b) requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with program requirements. The City of Paramount (the City) must submit an Interim Report and quarterly Project and Expenditure Reports that contain costs incurred during the covered period. Critical information pertaining to both the Interim Report and the Project and Expenditure Reports includes: ? Obligations and Expenditures o Current period obligation o Cumulative obligation o Current period expenditure o Cumulative expenditure Critical information pertaining to the Project and Expenditure Reports specifically includes: ? Subawards ? Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the recipient that are greater than $50,000. For amounts less than $50,000, the recipient must report in the aggregate for these same categories of loans issued; contracts and grants awarded; transfers made to other government entities and direct payments made by the recipient. Additionally, per the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Compliance and Reporting Guidance, all recipients are required to submit Project and Expenditure Reports on a timely basis as summarized in the quarterly report timelines table of the guidance. Condition: We identified 4 instances in which the City did not retain evidence to document the individual approving the City?s required performance reports. Current obligations were reported inaccurately for the Quarter 1 and 2 Project and Expenditure Reports. Additionally, expenditure information was reported inaccurately for the Quarter 2 Project and Expenditure Report and the report was submitted past the required deadline. Further, $48,834 for the purchase of energy efficient lighting upgrades to City Hall were reported incorrectly under ?Public Health - Negative Economic Impact? instead of ?Revenue Replacement?. Cause: The City?s procedures did not include documentation to evidence the individual that approved the reports. The City?s procedures did not ensure the Quarter 2 Project and Expenditure Report was prepared in accordance with program requirements and on a timely basis. Effect: The City did not comply with the requirements of 2 CFR 200.303 and inaccurate information was reported to the federal awarding agency. Questioned Costs: None reported. Context/Sampling: The entire population of one Interim Report and three quarterly Project and Expenditure Reports submitted during the year were selected for testing. Repeat Finding from Prior Year: No. Recommendation: We recommend the City enhance internal controls to ensure Interim and Project and Expenditure Reports are prepared in accordance with program requirements. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.