2023-004 - Procurement, Suspension, and Debarment – Internal Control over Procurement and Verification Against the System for Award Management (“SAM”) (Significant Deficiency)
Condition:
Community Development Block Grants-Entitlement Grants Cluster
Based on the City’s formal purchasing policy, purc...
2023-004 - Procurement, Suspension, and Debarment – Internal Control over Procurement and Verification Against the System for Award Management (“SAM”) (Significant Deficiency)
Condition:
Community Development Block Grants-Entitlement Grants Cluster
Based on the City’s formal purchasing policy, purchase orders are required to initiate purchases from procured vendors for transactions above $5,000. During our audit, we noted that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the uniform guidance.
Coronavirus State and Local Fiscal Recovery Funds
We determined that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the uniform guidance.
During our audit, we also noted that there was no supporting document to indicate that the City verified the vendor against the SAM to ensure the vendor was not suspended or debarred from federally-funded programs before the contract was entered into.
Management concurs.
Corrective Actions:
The City has an existing purchasing policy and procedures that require documentation for all purchases. Finance department has sent to all department heads reminder and the importance of compliance with the policy and procedures. The reminder also emphasizes the necessity of preparing a purchase order before procuring products or services from a vendor. There may be certain circumstances preventing the preparation of a purchase order prior to procurement, such as the nature of the services or the urgency of acquiring materials and supplies, departments may proceed with the procurement as long as the services or purchases are within adopted budget.
City Council approved the Federal Award Management Policy & Procedures on agenda item #4 on December 6, 2023. Finance staff has also updated the requisition form to include a verification of SAM.gov clearance, requiring any backup indicating the vendors status if it is federally funded. City staff has been diligently verifying the suspension or debarment for all federally funded expenditures.
Implemented
Name of Responsible Person:
Robert A. López, Chief of Police
Manuel Carrillo Jr., Director of Recreation & Community Services
Ron Garcia, Director of Community Development
Sam Gutierrez, Director of Public Works
Rose Tam, Director of Finance
Albert Trinh, Accounting Manager
Projected Implementation Date:
All actions needed have been Immediately implemented.