Finding ref number:
2023-001
Finding caption:
The District did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements.
Name, address, and telephone of District contact person:
Mark Lane, CFO
223 E 4th Street
Port Angeles, WA 98362-3015
(360...
Finding ref number:
2023-001
Finding caption:
The District did not have adequate internal controls for ensuring compliance with federal suspension and debarment requirements.
Name, address, and telephone of District contact person:
Mark Lane, CFO
223 E 4th Street
Port Angeles, WA 98362-3015
(360) 417-2383
Corrective action the auditee plans to take in response to the finding:
The County in its administration of its Coronavirus State and Local Fiscal Recovery Funds has historically complied with the federal suspension and debarment requirements principally through (1) ensuring each of its direct award and subrecipient contracts contain a clause or condition in the award contracts that states the contractor or subrecipient is not suspended or debarred, (2) requesting a certification to that effect, or (3) checking the SAM system to insure the contractor was not debarred or suspended. In this situation, the County procured IT equipment needed to improve the County's capability to conduct virtual meetings from a vendor under a "piggy-back" agreement under which debarment and suspension verification had been completed by another state agency. This vendor was also well known to the County as it had previously been utilized in procuring equipment with funding under the CARES Act. Staff managing this vendor relationship were unaware that reliance on prior debarment and suspension verification performed by another agency was not appropriate. In addition, due to significant turnover occurring in our SLFRF grant administration team occurring in late 2022 and early 2023, the single invoice triggering this finding--while properly documented with appropriate supporting documentation and approvals from staff managing the vendor relationship--was not reviewed by the SLFRF grant administration team to insure it was properly accompanied by a documented verification of debarment/suspension prior to its payment. As noted by the SAO in its audit finding, the vendor in question was not debarred or suspended from receiving federal monies, and no questioning of costs is involved.
While the County has spent almost all of its SLFRF funds to-date under agreements containing certification language addressing debarment or suspension where required, the County recognizes that in this single situation involving the procurement of goods totaling $31,239 that its internal controls did not function properly to detect that proper debarment or suspension verification had occurred. We view this very much as an isolated incident, particularly given that over $9.8 million of the $15.02 million of SLFRF direct funds awarded to the County have been expended by the County through the end of 2023 in accordance with federal guidance and requirements regarding these funds under a program whose guidance rules have been subject to constant change since the American Rescue Plan Act was first signed.
Regardless of the isolated nature of this incident, the County's management remains committed to insure this situation does not reoccur going forward, and as a result has or will be implementing the following corrective actions:
• To the very limited extent disbarment/suspension language does not appear in contracts for goods or services being funding through County SLFRF funds, expenditures for all projects involving purchases of goods and services will first have to be approved and reviewed by the County's SLFRF grant administration staff who will verify disbarment/suspension status prior to the entering into contracts or the disbursement of SLFRF funds.
• In the cases of piggy-back agreements, SLFRF grant administration staff will verify disbarment/suspension requirements have been met prior to payments for goods or services being approved that are funded with SLFRF funds; and
• Appropriate messaging has been and will continue to be communicated to all SLFRF funded project owners and staff, reiterating requirements that all federal procurement policies must be adhered to for all County purchases of goods and services involving SLFRF funds, including that debarment and suspension verification has been completed and documented, and that such documentation must be forwarded to SLFRF grant administration staff before any disbursements of SLFRF funds will be made.
We thank the SAO staff for identifying this issue and bringing it to our attention.
Anticipated date to complete corrective action: Immediately.