Audit 51630

Finding Number: 2022-001 Repeat Finding: No Program Name/Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Agency: Arizona Governor?s Office Federal Award Number: GFRT-21-1074 Pass-Through Agency: N/A Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Procurement, Suspension and Debarment CRITERIA Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. CONDITION The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. CAUSE The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. EFFECT The District was not in compliance with federal guidelines. CONTEXT A suspension and debarment check was not performed for two vendors with whom the District expended in excess of $25,000 but less than $100,000. The sample was not intended to be, and was not a statistically valid sample. RECOMMENDATION The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

Finding Number: 2022-001 Repeat Finding: No Program Name/Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Agency: Arizona Governor?s Office Federal Award Number: GFRT-21-1074 Pass-Through Agency: N/A Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Procurement, Suspension and Debarment CRITERIA Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. CONDITION The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. CAUSE The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. EFFECT The District was not in compliance with federal guidelines. CONTEXT A suspension and debarment check was not performed for two vendors with whom the District expended in excess of $25,000 but less than $100,000. The sample was not intended to be, and was not a statistically valid sample. RECOMMENDATION The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.