The City of Redmond takes seriously its responsibility to administer federal funds in compliance with the Uniform Guidance (2 CFR Part 200) and acknowledges the findings identified in this audit related to suspension and debarment verification, SLFRF reporting accuracy, and subrecipient monitoring. ...
The City of Redmond takes seriously its responsibility to administer federal funds in compliance with the Uniform Guidance (2 CFR Part 200) and acknowledges the findings identified in this audit related to suspension and debarment verification, SLFRF reporting accuracy, and subrecipient monitoring. The City has reviewed each finding, confirmed the underlying facts, and taken corrective action to address both the specific instances identified and the broader control gaps that enabled them. Independent of this audit, the City had already begun a citywide effort in 2025 to strengthen its grant management practices. This effort produced a new Grant Management Policy and Procedure Manual and accompanying Standard Operating Procedures (SOPs), which leadership approved and published citywide in April 2026. Every department attended an in-person presentation on the new policy and received training on available grant management resources. The SOPs set minimum standards for procurement; suspension/debarment verification; monitoring, reconciliation of allowable costs, and subrecipient monitoring; and grant reporting — directly addressing the root causes identified in this audit. In 2025 and 2026, the City also created and filled new positions to centralize grant management functions citywide, adding a required second-party review of progress reports and reimbursement requests before submission to funding agencies. The City views the specific instances identified in this audit as isolated gaps that existed prior to these citywide improvements, and believes the policy, staffing, and procedural changes described below directly resolve them. Suspension and Debarment The City's standard contract templates for federally funded procurements include suspension and debarment verification requirements, and this requirement applied to all applicable City contracts except the design contract at issue, where the verification was not completed and documented 76 days after the contract's effective date. The City has since confirmed the contractor was not suspended, debarred, or otherwise excluded during the relevant period, and no federal funds were paid to an ineligible party. • Added a required step to the contract routing process to verify completion of the debarment check and attach verification documentation before a contract proceeds. • Confirmed debarment verification is included on applicable checklists for all work involving labor and/or federal funding of $25,000 or more, and re-emphasized to staff the requirement to complete and retain this verification before contract execution and fund disbursement. • Both Finance and Capital Projects have been made aware of this error. Capital Projects has confirmed its understanding that the SAM.gov check must be completed and documented before finalizing any applicable contract. • Finance is revising the contract routing form to add a required field confirming whether a contract will be paid partially or fully with grant funds, alerting Purchasing and Accounts Payable to confirm that verification was completed before any payment is released. • The new citywide SOPs define the required timing for suspension/debarment checks, closing the procedural gap that allowed this contract to proceed without documented, timely verification. • The City will update agreement boilerplates to require vendors to attest that they are not debarred. This will supplement the City's existing verification process performed before contract execution and fund disbursement. Reporting During 2025, City staff began developing a citywide Grant Management Policy and Procedure Manual and accompanying Standard Operating Procedures (SOPs) to strengthen the City's compliance with federal grant requirements. The manual was approved by leadership and published citywide in April 2026. Every department attended an in-person presentation on the new policy, along with training on how to access additional grant management resources. The new SOPs establish specific standards for grant reporting, including required reconciliation practices and review procedures intended to prevent the type of discrepancies identified in this finding. In 2025 and 2026, the City created and filled new positions to centralize grant management functions citywide. These positions are responsible for tracking grant deadlines and providing a required second-party review of progress reports and reimbursement requests before they are submitted to funding agencies. The City views this finding as an isolated gap that predates these citywide improvements and believes the staffing and procedural changes described below directly address the identified root cause. Corrective Action Taken • New centralized grant management positions now review and approve all progress reports and reimbursement requests before submission to the funding agency, ensuring a required two-party review of all external reporting. • The new SOPs require staff to reconcile grant transactions multiple times throughout the year, rather than solely at year-end, so discrepancies are identified and corrected well before reporting deadlines. Subrecipient Monitoring The City's subrecipient monitoring procedures required subrecipients to submit financial statements or Single Audit reports only during the initial application year and did not include a documented process for annual verification in subsequent years. As a result, for the six subrecipients tested, the City could not confirm whether required Single Audits were received or whether applicable audit findings had been addressed in the years following the first year of the subaward agreement Corrective Action Taken • Staff who manage subawards have completed additional training on subrecipient monitoring requirements, including verification of Single Audit compliance. • Staff who manage subawards will update the sub-monitoring checklist to include “Single Audit” as part of the update every year. • Revised risk assessment tools now specify a minimum required frequency for completing subrecipient risk assessments and reviewing subrecipient financial reports. • The new citywide SOPs establish a defined minimum frequency for subrecipient monitoring activities, including annual verification of Single Audit status for all active subrecipients.