Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
U.S. Department of Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds - 21.027 Criteria or Specific Requirement - Suspension and Debarment and Material Weakness In accordance with 2 CFR 200.214, 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 (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. In accordance with 2 CFR Section 180.300, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition - Suspension and debarment checks were not completed for a vendor prior to entering into a contract. Cause - The City's controls to ensure suspension and debarment checks on vendors receiving federal funds did not operate effectively. Effect - Federal funds could be paid to entities that are suspended or debarred. Questioned Costs - None noted, as the vendor was reviewed and determined to not be suspended or debarred. Context - The City only entered into one contract during the year ended December 31, 2024 that was considered a "covered transaction" and spent approximately $540,000 under this contract. This single contract was selected for testing suspension and debarment and uncovered the City did not check the vendor's suspension and debarment status prior to purchase. The City completed the suspsension and debarment check subsequent to purchase and verified the vendor was not suspended or disbarred. Identification as a Repeat Finding, if applicable - None noted. Recommendation - Policies and procedures should be modified to ensure that suspension and debarment checks are performed on vendors prior to making purchases with federal funds. View of Responsible Official and Planned Corrective Actions - Management agrees with the stated finding and has implemented a corrective action plan.
Department of Treasury, State of Iowa Department of Management, Federal Financial Assistance Listing 21.029, 526659 Coronavirus Capital Projects Fund Procurement, Suspension & Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.318 maintains that recipients must have and use documented procurement policies and must conform procurement standards in sections 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are applicable. Additionally, 2 CFR 200.214 requires recipients to restrict the subawards and contract with certain parities that are debarred, suspended, or excluded from ineligible participation in Federal assistance programs or activities. Condition: Testing of the federal program identified the following: • The Cooperative’s formally documented procurement policy was missing one required element as it relates to the methods of procurement. • One instance where the Cooperative followed a bid process, however, the documentation was not retained to support the selection. Additionally, the contract with the vendor was missing required contract provisions in accordance with Uniform Guidance. • One instance where the Cooperative did not follow the procurement process as detailed in the procurement policy and did not have any formal documentation or contract in place with the vendor. • Two instances where the Cooperative entered into a contract with a vendor over $25,000 and there was no review performed to ensure the vendor was not suspended or debarred. Cause: Contract provisions were not evaluated compared to Uniform Guidance contract requirements. Contracts entered were not evaluated in accordance with Uniform Guidance as it relates to suspension and debarment. Effect: Ineffective controls over this are of compliance could result in a reasonable possibility the Cooperative would be noncompliant with the compliance requirements outlined above. Additionally, the cooperative may enter into a covered transaction with a vendor that is suspended or debarred. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 2 out of 4 vendors were selected for testing. Repeat Finding form Prior Year: No Recommendation: We recommend the Cooperative update their procurement policy to ensure it includes the required elements as it relates to the methods of procurement. In addition, we suggest that management implement procedures and control processes related to the review of contracts to ensure the procurement methods are being followed as it relates to covered transactions and those contracts include the required Uniform Guidance provisions. Also, management should ensure vendors are not suspended or debarred from doing business with the federal government. Views of Responsible Officials: Management agrees with the finding.
Criteria: According to 2 CFR §200.214, nonfederal entities other than states must follow the suspension and debarment standards set out at 2 CFR Part 180, which restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Condition: During our audit of the Organization's federal awards, we identified a deficiency in the grantee’s procurement, suspension, and debarment procedures related to suspension and debarment for 4 of 4 subcontractors we reviewed. Specifically, the grantee did not verify that subcontractors were not excluded or disqualified before entering into transactions expected to exceed $25,000 in accordance with the Uniform Guidance. Cause: The Organization did not have adequate policies and procedures or internal controls in place to ensure compliance with the procurement, suspension, and debarment requirements. Effect: The Organization may be paying subcontractors that are suspended or debarred, which would be unallowable costs. However, none of the 4 subcontractors were suspended or debarred as of the date audit procedures were performed. Recommendation: We recommend that the Organization implement policies and procedures to ensure that all subcontractors and subrecipients of covered transactions are properly verified before entering into transactions, and that this be documented as a control each time it is performed. Views of Responsible Officials: Management agrees with the finding and procedures have been implemented to address the related issues.
Criteria: According to 2 CFR §200.214, nonfederal entities other than states must follow the suspension and debarment standards set out at 2 CFR Part 180, which restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Condition: During our audit of the Organization's federal awards, we identified a deficiency in the grantee’s procurement, suspension, and debarment procedures related to suspension and debarment for 4 of 4 subcontractors we reviewed. Specifically, the grantee did not verify that subcontractors were not excluded or disqualified before entering into transactions expected to exceed $25,000 in accordance with the Uniform Guidance. Cause: The Organization did not have adequate policies and procedures or internal controls in place to ensure compliance with the procurement, suspension, and debarment requirements. Effect: The Organization may be paying subcontractors that are suspended or debarred, which would be unallowable costs. However, none of the 4 subcontractors were suspended or debarred as of the date audit procedures were performed. Recommendation: We recommend that the Organization implement policies and procedures to ensure that all subcontractors and subrecipients of covered transactions are properly verified before entering into transactions, and that this be documented as a control each time it is performed. Views of Responsible Officials: Management agrees with the finding and procedures have been implemented to address the related issues.
FINDING 2024-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2024 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-005. Condition and Context An effective internal control system was not in place at the County to ensure compliance with the requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement The County had not established a purchasing policy that would reflect applicable state laws and regulations, including procedures to avoid acquisition of unnecessary or duplicative items; procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured; and did not maintain written standards of conduct covering conflicts of interest and governing actions of its employees engaged in the selection, award, and administration of contracts. INDIANA STATE BOARD OF ACCOUNTS 20 SHELBY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Suspension and Debarment Prior to entering into subawards and covered transactions with COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The County did not have internal controls in place to ensure compliance with the suspension and debarment compliance requirement. Upon inquiry of the County's policies and procedures related to suspension and debarment requirements, the County stated that they did not have policies or procedures in place for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities. Two covered transactions for goods or services that equaled or exceeded $25,000 that were paid from SLFRF funds during the audit period were identified. Each transaction was examined to determine whether the County verified the suspension and debarment status of either vendor prior to payment. The two covered transactions, totaling $95,122, did not include the appropriate provisions in the contracts nor did the County require a certification or check the EPLS to ensure the entity was not suspended or debarred prior to making payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327." INDIANA STATE BOARD OF ACCOUNTS 21 SHELBY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.214 states: "Recipients and subrecipients are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the County. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors and subrecipients to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Any program funds the County used to pay vendors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls and develop policies and procedures to ensure contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Additionally, we recommended the County establish documented procurement procedures consistent with state and local laws for the acquisition of property or services required under a federal award or subaward. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2024-002 Procurement Policy During our review of the Organization’s procurement policy, we noted that while a general framework exists, the policy does not currently address several key elements required under 2 CFR Part 200 - Uniform Guidance. Specifically, the procurement policy omits critical components related to vendor acceptance, debarment verification, domestic procurement preference, and the detailed processes required for the Simplified Acquisition Threshold. The absence of these elements increases the risk of noncompliance with Federal procurement standards, vendor selection errors, and insufficient documentation in the event of Federal oversight or audit. Federal Agency: Multiple (Various pass-through and direct Federal awards) AL #: Various. Compliance requirement: Audit requirement 2 CFR Part 200 Type of Finding: Noncompliance and significant deficiency in internal control over compliance. Repeat Finding: No. Criteria: According to Uniform Guidance, non-federal entities must establish and follow procurement policies that: Include procedures to verify vendor eligibility through SAM.gov per 2 CFR §200.214. Clearly define procurement methods and thresholds, including the Simplified Acquisition Threshold. Incorporate a domestic preference for procurements per 2 CFR §200.322. Maintain documented procedures for handling procurement disputes, protests, and source evaluations. Cause: The Organization’s procurement policy has not been formally updated to fully incorporate the current Federal requirements as outlined in Uniform Guidance. Effect: Without a fully compliant procurement policy, the Organization is at increased risk of noncompliance with Federal procurement standards, inadvertently contracting with ineligible or debarred vendors and inadequate documentation to support decisions. Questioned Costs: No questioned costs identified. Recommendation: We recommend that management amend and formally update the procurement policy to address the following critical areas: Vendor acceptance and debarment testing, definition and procedures for the Simplified Acquisition Threshold, domestic preference for procurements, procedures for handling procurement issues, and policy governance and version control. Management Response: We appreciate AAFCPAs’ review and agree that our procurement policy requires updates to better align with current federal requirements and internal best practices. To improve clarity, accountability, and regulatory compliance, the Finance Department will work with the Fiscal Sponsorship Department to develop the Organization’s procurement policy going forward. We will ensure the updated policy includes the following: We will formalize procedures to confirm vendor eligibility, including consistent use of the SAM.gov exclusions list prior to entering contracts, and ensure documentation is retained for audit purposes. The updated policy will outline specific steps for procurement activities at various thresholds, particularly mid-range purchases, with requirements for obtaining multiple quotes and documenting price comparisons. In alignment with Federal guidelines, the revised policy will include a provision supporting preference for U.S.-made products and materials when feasible. New sections will be added to address how the Organization will manage vendor selection reviews, disputes, and issue resolution to promote fairness and consistency in the procurement process. To ensure transparency and version control, the policy will include the date of each revision and a process for periodic review. The Fiscal Sponsorship Department will implement the updated policy, coordinate training for programmatic staff, and monitor compliance with the updated procedures. We expect the revised procurement policy to be finalized and implemented by July 31, 2025.
Finding 2024-002 Procurement Policy During our review of the Organization’s procurement policy, we noted that while a general framework exists, the policy does not currently address several key elements required under 2 CFR Part 200 - Uniform Guidance. Specifically, the procurement policy omits critical components related to vendor acceptance, debarment verification, domestic procurement preference, and the detailed processes required for the Simplified Acquisition Threshold. The absence of these elements increases the risk of noncompliance with Federal procurement standards, vendor selection errors, and insufficient documentation in the event of Federal oversight or audit. Federal Agency: Multiple (Various pass-through and direct Federal awards) AL #: Various. Compliance requirement: Audit requirement 2 CFR Part 200 Type of Finding: Noncompliance and significant deficiency in internal control over compliance. Repeat Finding: No. Criteria: According to Uniform Guidance, non-federal entities must establish and follow procurement policies that: Include procedures to verify vendor eligibility through SAM.gov per 2 CFR §200.214. Clearly define procurement methods and thresholds, including the Simplified Acquisition Threshold. Incorporate a domestic preference for procurements per 2 CFR §200.322. Maintain documented procedures for handling procurement disputes, protests, and source evaluations. Cause: The Organization’s procurement policy has not been formally updated to fully incorporate the current Federal requirements as outlined in Uniform Guidance. Effect: Without a fully compliant procurement policy, the Organization is at increased risk of noncompliance with Federal procurement standards, inadvertently contracting with ineligible or debarred vendors and inadequate documentation to support decisions. Questioned Costs: No questioned costs identified. Recommendation: We recommend that management amend and formally update the procurement policy to address the following critical areas: Vendor acceptance and debarment testing, definition and procedures for the Simplified Acquisition Threshold, domestic preference for procurements, procedures for handling procurement issues, and policy governance and version control. Management Response: We appreciate AAFCPAs’ review and agree that our procurement policy requires updates to better align with current federal requirements and internal best practices. To improve clarity, accountability, and regulatory compliance, the Finance Department will work with the Fiscal Sponsorship Department to develop the Organization’s procurement policy going forward. We will ensure the updated policy includes the following: We will formalize procedures to confirm vendor eligibility, including consistent use of the SAM.gov exclusions list prior to entering contracts, and ensure documentation is retained for audit purposes. The updated policy will outline specific steps for procurement activities at various thresholds, particularly mid-range purchases, with requirements for obtaining multiple quotes and documenting price comparisons. In alignment with Federal guidelines, the revised policy will include a provision supporting preference for U.S.-made products and materials when feasible. New sections will be added to address how the Organization will manage vendor selection reviews, disputes, and issue resolution to promote fairness and consistency in the procurement process. To ensure transparency and version control, the policy will include the date of each revision and a process for periodic review. The Fiscal Sponsorship Department will implement the updated policy, coordinate training for programmatic staff, and monitor compliance with the updated procedures. We expect the revised procurement policy to be finalized and implemented by July 31, 2025.
Finding 2024-001: Suspension and Debarment (Significant Deficiency) Information on the Federal Program: 93.048 Criteria: According to 2 CFR §200.30, the non-Federal entity (i.e. the Organization) must: (a) 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 terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or in the "Internal Control Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-Federal entity is subject to to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The Organization failed to perform and/or properly document its due diligence with respect to these requirements. Cause: The Organization experienced turnover during the year, resulting in inconsistency and oversight of the compliance requirement. Effect or Potential Effect: The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. If a non-Federal entity knowingly does business with an excluded person, the agency responsible for the Center's funding may disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend the non-Federal entity, or take other remedies as appropriate. Questioned Costs: None noted. Context: During our audit, we noted two cases our of nine samples in which the Organization did not perform or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well.
Procurement, Suspension and Debarment Federal agency: U.S. Department of Health and Human Services Program: Continuation of the National Evaluations System for Health Technology Coordinating Center Assistance listing number: 93.103 Federal award identification number and year: • 2U01FD006292-06 2024 • 3U01FD006292-06S1 2023 Criteria: 2 CFR 200.318 states non-federal entities must have and use documented procurement procedures that conform to 2 CFR 200.317 through 200.327. 2 CFR 200.214 states non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Order 12549 and 12689, 2 CFR Part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 200 requires adequate documentation of compliance with 2 CFR 200.214. Condition and context: The Organization established policies and procedures over suspension and debarment, including checking all vendors against the government suspension and debarment listing. The policies and procedures for suspension and debarment were being followed however the evidence of the search on sam.gov was not retained. A sample of five vendors with a total contract value of $8,528,526 was selected from a population of twelve. Cause: The Organization’s management did not retain evidence of compliance with the above criteria regarding suspension and debarment due to oversight. Effect: The Organization’s documentation was lacking evidence of tracking vendors for suspension and debarment. Questioned costs: None Repeat finding: No Recommendation: We recommend management updates its policies and procedures to ensure adequate supporting documentation of suspension and debarment verification is maintained. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Procurement, Suspension and Debarment Federal agency: U.S. Department of Health and Human Services Program: Continuation of the National Evaluations System for Health Technology Coordinating Center Assistance listing number: 93.103 Federal award identification number and year: • 2U01FD006292-06 2024 • 3U01FD006292-06S1 2023 Criteria: 2 CFR 200.318 states non-federal entities must have and use documented procurement procedures that conform to 2 CFR 200.317 through 200.327. 2 CFR 200.214 states non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Order 12549 and 12689, 2 CFR Part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 200 requires adequate documentation of compliance with 2 CFR 200.214. Condition and context: The Organization established policies and procedures over suspension and debarment, including checking all vendors against the government suspension and debarment listing. The policies and procedures for suspension and debarment were being followed however the evidence of the search on sam.gov was not retained. A sample of five vendors with a total contract value of $8,528,526 was selected from a population of twelve. Cause: The Organization’s management did not retain evidence of compliance with the above criteria regarding suspension and debarment due to oversight. Effect: The Organization’s documentation was lacking evidence of tracking vendors for suspension and debarment. Questioned costs: None Repeat finding: No Recommendation: We recommend management updates its policies and procedures to ensure adequate supporting documentation of suspension and debarment verification is maintained. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Assistance Listing, Federal Agency, and Program Name ALN 21.027, Department of Treasury, COVID 19 Coronavirus State and Local Fiscal Recovery Funds ALN 20.205, Department of Transportation, Highway Planning and Construction Federal Award Identification Number and Year ALN 21.027: 1505 0271, 2022 ALN 20.205: 24455, 2021 Pass through Entity ALN 21.027: Not applicable ALN 20.205: Colorado Department of Transportation Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 200.214, nonfederal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in federal awards. Nonfederal entities may satisfy the criteria prescribed by 2 CFR part 180 by either checking SAM.gov exclusions, collecting a certification or adding a clause or condition to the covered transaction with the contracted party. Condition The Town could not provide evidence that it performed a check to verify its contractors were not suspended or debarred. Questioned Costs None Identification of How Questioned Costs Were Computed Not applicable Context The Town used each of its grants to procure services from one contractor and was unable to provide evidence that the check for suspension and debarment was completed prior to entering into its contracts, respectively. Plante & Moran, PLLC reviewed the SAM.gov website, noting that the two vendors were not listed as suspended or disbarred. Cause and Effect The Town did not retain evidence to support that it had conducted the search for whether the contractors were suspended or debarred prior to entering into the contracts. The lack of control could result in the Town entering into contracts with contractors that are suspended or debarred. Subsequently, the Town did complete the search on SAM.gov and retained evidence to support that the contractors were not suspended of debarred, thereby creating no questioned costs. Recommendation We recommend the Town implement its controls as designed by retaining supporting documentation to support that contractors are not suspended or debarred. Views of Responsible Officials and Corrective Action Plan - The Town acknowledges the finding. The oversight was unintentional and occurred due to a lack of formalized procedures for verifying suspension and debarment status for all applicable federal contracts and subawards.
Assistance Listing, Federal Agency, and Program Name ALN 21.027, Department of Treasury, COVID 19 Coronavirus State and Local Fiscal Recovery Funds ALN 20.205, Department of Transportation, Highway Planning and Construction Federal Award Identification Number and Year ALN 21.027: 1505 0271, 2022 ALN 20.205: 24455, 2021 Pass through Entity ALN 21.027: Not applicable ALN 20.205: Colorado Department of Transportation Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 200.214, nonfederal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in federal awards. Nonfederal entities may satisfy the criteria prescribed by 2 CFR part 180 by either checking SAM.gov exclusions, collecting a certification or adding a clause or condition to the covered transaction with the contracted party. Condition The Town could not provide evidence that it performed a check to verify its contractors were not suspended or debarred. Questioned Costs None Identification of How Questioned Costs Were Computed Not applicable Context The Town used each of its grants to procure services from one contractor and was unable to provide evidence that the check for suspension and debarment was completed prior to entering into its contracts, respectively. Plante & Moran, PLLC reviewed the SAM.gov website, noting that the two vendors were not listed as suspended or disbarred. Cause and Effect The Town did not retain evidence to support that it had conducted the search for whether the contractors were suspended or debarred prior to entering into the contracts. The lack of control could result in the Town entering into contracts with contractors that are suspended or debarred. Subsequently, the Town did complete the search on SAM.gov and retained evidence to support that the contractors were not suspended of debarred, thereby creating no questioned costs. Recommendation We recommend the Town implement its controls as designed by retaining supporting documentation to support that contractors are not suspended or debarred. Views of Responsible Officials and Corrective Action Plan - The Town acknowledges the finding. The oversight was unintentional and occurred due to a lack of formalized procedures for verifying suspension and debarment status for all applicable federal contracts and subawards.
Assistance Listing, Federal Agency, and Program Name ALN 21.027, Department of Treasury, COVID 19 Coronavirus State and Local Fiscal Recovery Funds ALN 20.205, Department of Transportation, Highway Planning and Construction Federal Award Identification Number and Year ALN 21.027: 1505 0271, 2022 ALN 20.205: 24455, 2021 Pass through Entity ALN 21.027: Not applicable ALN 20.205: Colorado Department of Transportation Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 200.214, nonfederal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in federal awards. Nonfederal entities may satisfy the criteria prescribed by 2 CFR part 180 by either checking SAM.gov exclusions, collecting a certification or adding a clause or condition to the covered transaction with the contracted party. Condition The Town could not provide evidence that it performed a check to verify its contractors were not suspended or debarred. Questioned Costs None Identification of How Questioned Costs Were Computed Not applicable Context The Town used each of its grants to procure services from one contractor and was unable to provide evidence that the check for suspension and debarment was completed prior to entering into its contracts, respectively. Plante & Moran, PLLC reviewed the SAM.gov website, noting that the two vendors were not listed as suspended or disbarred. Cause and Effect The Town did not retain evidence to support that it had conducted the search for whether the contractors were suspended or debarred prior to entering into the contracts. The lack of control could result in the Town entering into contracts with contractors that are suspended or debarred. Subsequently, the Town did complete the search on SAM.gov and retained evidence to support that the contractors were not suspended of debarred, thereby creating no questioned costs. Recommendation We recommend the Town implement its controls as designed by retaining supporting documentation to support that contractors are not suspended or debarred. Views of Responsible Officials and Corrective Action Plan - The Town acknowledges the finding. The oversight was unintentional and occurred due to a lack of formalized procedures for verifying suspension and debarment status for all applicable federal contracts and subawards.
2024-003 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Criteria Per 2 CFR 200.214, non-federal entities are prohibited from contracting with parties that are suspended or debarred. 2 CFR 200.318(i) also states that "subrecipients must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection and the basis for the contract price." Condition The Organization has a procurement policy in place; however, the Organization neglected to document their suspension and debarment verification process for one of four procurement transactions tested. The Organization is also required by the Washington State Department of Agriculture ("WSDA") to receive prior approval for any equipment purchase or equipment repairs over $5,000. One of the four transactions tested did not receive prior approval from WSDA to make the purchase. There was no documentation that could support approval was received from WSDA after the purchase had been made. Cause The Organization claimed the suspension and debarment check occurred prior to entering into the transaction but neglected to retain documentation. The Organization also did not properly follow its procurement policy, nor the policy required by WSDA, requiring prior approval for any equipment purchase or repair over $5,000. Effect Payments may have been made to suspended or debarred vendors and gone undetected by the Organization. The Organization could have also made an equipment purchase or equipment repair that would not be refunded by WSDA (the pass-through entity). Repeat Finding No. Auditor's Recommendation The Organization should ensure the employee responsible for conducting a suspension and debarment check is (1) aware of the necessity to document the verification was done and (2) capable of documenting the verification. The Organization should also reevaluate its internal controls over procurements with WSDA funding to ensure that the Organization is receiving approval from the WSDA prior to making the purchase. Employees tasked responsible for making procurement transactions should be educated on the proper procurement procedures. Management should be checking for the WSDA approval prior to signing off on cash disbursements for equipment purchases or equipment repairs.
2024-003 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Criteria Per 2 CFR 200.214, non-federal entities are prohibited from contracting with parties that are suspended or debarred. 2 CFR 200.318(i) also states that "subrecipients must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection and the basis for the contract price." Condition The Organization has a procurement policy in place; however, the Organization neglected to document their suspension and debarment verification process for one of four procurement transactions tested. The Organization is also required by the Washington State Department of Agriculture ("WSDA") to receive prior approval for any equipment purchase or equipment repairs over $5,000. One of the four transactions tested did not receive prior approval from WSDA to make the purchase. There was no documentation that could support approval was received from WSDA after the purchase had been made. Cause The Organization claimed the suspension and debarment check occurred prior to entering into the transaction but neglected to retain documentation. The Organization also did not properly follow its procurement policy, nor the policy required by WSDA, requiring prior approval for any equipment purchase or repair over $5,000. Effect Payments may have been made to suspended or debarred vendors and gone undetected by the Organization. The Organization could have also made an equipment purchase or equipment repair that would not be refunded by WSDA (the pass-through entity). Repeat Finding No. Auditor's Recommendation The Organization should ensure the employee responsible for conducting a suspension and debarment check is (1) aware of the necessity to document the verification was done and (2) capable of documenting the verification. The Organization should also reevaluate its internal controls over procurements with WSDA funding to ensure that the Organization is receiving approval from the WSDA prior to making the purchase. Employees tasked responsible for making procurement transactions should be educated on the proper procurement procedures. Management should be checking for the WSDA approval prior to signing off on cash disbursements for equipment purchases or equipment repairs.
2024-003 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Criteria Per 2 CFR 200.214, non-federal entities are prohibited from contracting with parties that are suspended or debarred. 2 CFR 200.318(i) also states that "subrecipients must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection and the basis for the contract price." Condition The Organization has a procurement policy in place; however, the Organization neglected to document their suspension and debarment verification process for one of four procurement transactions tested. The Organization is also required by the Washington State Department of Agriculture ("WSDA") to receive prior approval for any equipment purchase or equipment repairs over $5,000. One of the four transactions tested did not receive prior approval from WSDA to make the purchase. There was no documentation that could support approval was received from WSDA after the purchase had been made. Cause The Organization claimed the suspension and debarment check occurred prior to entering into the transaction but neglected to retain documentation. The Organization also did not properly follow its procurement policy, nor the policy required by WSDA, requiring prior approval for any equipment purchase or repair over $5,000. Effect Payments may have been made to suspended or debarred vendors and gone undetected by the Organization. The Organization could have also made an equipment purchase or equipment repair that would not be refunded by WSDA (the pass-through entity). Repeat Finding No. Auditor's Recommendation The Organization should ensure the employee responsible for conducting a suspension and debarment check is (1) aware of the necessity to document the verification was done and (2) capable of documenting the verification. The Organization should also reevaluate its internal controls over procurements with WSDA funding to ensure that the Organization is receiving approval from the WSDA prior to making the purchase. Employees tasked responsible for making procurement transactions should be educated on the proper procurement procedures. Management should be checking for the WSDA approval prior to signing off on cash disbursements for equipment purchases or equipment repairs.
2024-003 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Criteria Per 2 CFR 200.214, non-federal entities are prohibited from contracting with parties that are suspended or debarred. 2 CFR 200.318(i) also states that "subrecipients must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection and the basis for the contract price." Condition The Organization has a procurement policy in place; however, the Organization neglected to document their suspension and debarment verification process for one of four procurement transactions tested. The Organization is also required by the Washington State Department of Agriculture ("WSDA") to receive prior approval for any equipment purchase or equipment repairs over $5,000. One of the four transactions tested did not receive prior approval from WSDA to make the purchase. There was no documentation that could support approval was received from WSDA after the purchase had been made. Cause The Organization claimed the suspension and debarment check occurred prior to entering into the transaction but neglected to retain documentation. The Organization also did not properly follow its procurement policy, nor the policy required by WSDA, requiring prior approval for any equipment purchase or repair over $5,000. Effect Payments may have been made to suspended or debarred vendors and gone undetected by the Organization. The Organization could have also made an equipment purchase or equipment repair that would not be refunded by WSDA (the pass-through entity). Repeat Finding No. Auditor's Recommendation The Organization should ensure the employee responsible for conducting a suspension and debarment check is (1) aware of the necessity to document the verification was done and (2) capable of documenting the verification. The Organization should also reevaluate its internal controls over procurements with WSDA funding to ensure that the Organization is receiving approval from the WSDA prior to making the purchase. Employees tasked responsible for making procurement transactions should be educated on the proper procurement procedures. Management should be checking for the WSDA approval prior to signing off on cash disbursements for equipment purchases or equipment repairs.
2024-003 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Criteria Per 2 CFR 200.214, non-federal entities are prohibited from contracting with parties that are suspended or debarred. 2 CFR 200.318(i) also states that "subrecipients must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection and the basis for the contract price." Condition The Organization has a procurement policy in place; however, the Organization neglected to document their suspension and debarment verification process for one of four procurement transactions tested. The Organization is also required by the Washington State Department of Agriculture ("WSDA") to receive prior approval for any equipment purchase or equipment repairs over $5,000. One of the four transactions tested did not receive prior approval from WSDA to make the purchase. There was no documentation that could support approval was received from WSDA after the purchase had been made. Cause The Organization claimed the suspension and debarment check occurred prior to entering into the transaction but neglected to retain documentation. The Organization also did not properly follow its procurement policy, nor the policy required by WSDA, requiring prior approval for any equipment purchase or repair over $5,000. Effect Payments may have been made to suspended or debarred vendors and gone undetected by the Organization. The Organization could have also made an equipment purchase or equipment repair that would not be refunded by WSDA (the pass-through entity). Repeat Finding No. Auditor's Recommendation The Organization should ensure the employee responsible for conducting a suspension and debarment check is (1) aware of the necessity to document the verification was done and (2) capable of documenting the verification. The Organization should also reevaluate its internal controls over procurements with WSDA funding to ensure that the Organization is receiving approval from the WSDA prior to making the purchase. Employees tasked responsible for making procurement transactions should be educated on the proper procurement procedures. Management should be checking for the WSDA approval prior to signing off on cash disbursements for equipment purchases or equipment repairs.
Criteria or Specific Requirement – Per 2 CFR §180.300 and §200.214, non-federal entities are prohibited from entering into covered transactions (e.g., contracts or subawards expected to equal or exceed $25,000) with parties that are suspended, debarred, or otherwise excluded from participation in federal programs. Conditions – Verification of SAMS.gov vendors was not performed. Context – During our testing of procurement, we sampled nine expenditures totaling $367,163. The total population of procurement expenditures charged to the program was $800,000. We noted that all nine selections of expenditures did not have SAMS.gov verification documentation. Cause – The Association did not have a formal process or checklist to ensure that vendors were checked against the SAM.gov exclusion list before contract award. Procurement staff were not trained on this requirement. Effect – Use of non-approved vendors could have occurred. However, as part our audit procedures, we determined that the expenditures were made with contractors which were not suspended or disbarred and were approved on the SAMS.gov website. Recommendation – We recommend the Association implement a formal policy and procedure to verify all vendors against SAM.gov for covered transactions exceeding $25,000. Staff responsible for federal procurement should be trained, and documentation of vendor status verification should be retained with procurement records. Views of Responsible Officials and Planned Corrective Actions – Procurement Policy was updated and documentation will be maintained to support vendor verification in the future.
Subject: 2024-002 Material Weakness – Procurement and Suspension and Debarment Noncompliance Federal Agency: Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness – Procurement and Suspension and Debarment Noncompliance Criteria: In accordance with 2 CFR §200.214 and 2 CFR Part 180, the City is required to ensure that it does not enter into a covered transaction with a party that is suspended or debarred. Verification must be performed through one of the following: checking SAM.gov, collecting a certification, or adding a contract clause requiring compliance. Federal Award Findings and Questioned Costs (Continued) Condition and Context: The City lacked a formalized procedure for verifying suspension and debarment status for 1 covered transaction under revenue loss category for the CSLFRF award. This covered transaction paid for additional costs added onto the purchase of a fire engine with a change order related to increased manufacturing costs incurred as a result of the Coronavirus pandemic. The City did not verify suspension and debarment on this vendor prior to paying for these costs under CSLFRF. Without proper verification, the City risks using federal funds to engage with ineligible vendors, which could result in questioned costs, repayment obligations to the federal government, or future audit findings that may impact continued federal funding. Although no suspended or debarred vendors were identified in the sampled transactions, the lack of internal controls and documentation constitutes material noncompliance with 2 CFR §200.214. Cause and Effect: The City did not establish formal procedures on suspension and debarment requirements for one of the eleven covered transactions tested, resulting in material noncompliance with the suspension and debarment requirements of the CSLRF program and increased risk of using federal funds with ineligible vendors. Recommendation: We recommend the City develop and implement formal written procedures to ensure suspension and debarment checks are performed on all CSLFRF transactions and documented appropriately. Views of Responsible Officials and Planned Corrective Actions: The City agrees with the recommendation and plans to implement corrective action by December 31, 2025. Staff are in the process of drafting internal policies for adoption by the appropriate boards to address this item as soon as possible for any of our grant funds not managed by a third-party administrator.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
Criteria or Specific Requirements Per 2 CFR 200.214 Suspension and debarment, non-Federal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or excluded from or ineligible for participation in Federal assistance programs or activities. Per CFR 180.300, Subpart C: Responsibilities of Participants Regarding Transactions Doing Business With Other Persons, when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified. The entity does this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-002. Per the CAP, the Foundation will conduct regular, ongoing monitoring of vendors providing services billed to grantors, including identifying all grant-reimbursed vendors and coordinating with Accounts Payable to perform annual suspension and debarment checks. We noted that the Foundation’s updated formal policies and procedures now require suspension and debarment checks at initial vendor setup and on an annual basis thereafter. Based on test work over a sample of 6 vendors covering the period from September 1, 2024 (CAP implementation date) to December 31, 2024, we did not identify any vendors in the sample who were suspended or debarred. However, we were unable to obtain documentation demonstrating that the Foundation performed the annual vendor suspension and debarment verification checks. Evidence that the annual vendor suspension and debarment verification checks had been performed was not yet available. Questioned Costs None. Cause and Effect For the period from September 1, 2024 (CAP implementation date) to December 31, 2024, the annual vendor suspension and debarment verification checks were still in progress, and supporting documentation was not yet available. The Foundation subsequently completed the annual checks in February 2025, which aligns with the typical start dates of most vendor contracts.
U.S. Department of Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds - 21.027 Criteria or Specific Requirement - Suspension and Debarment and Material Weakness In accordance with 2 CFR 200.214, 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 (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. In accordance with 2 CFR Section 180.300, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition - Suspension and debarment checks were not completed for a vendor prior to entering into a contract. Cause - The City's controls to ensure suspension and debarment checks on vendors receiving federal funds did not operate effectively. Effect - Federal funds could be paid to entities that are suspended or debarred. Questioned Costs - None noted, as the vendor was reviewed and determined to not be suspended or debarred. Context - The City only entered into one contract during the year ended December 31, 2024 that was considered a "covered transaction" and spent approximately $540,000 under this contract. This single contract was selected for testing suspension and debarment and uncovered the City did not check the vendor's suspension and debarment status prior to purchase. The City completed the suspsension and debarment check subsequent to purchase and verified the vendor was not suspended or disbarred. Identification as a Repeat Finding, if applicable - None noted. Recommendation - Policies and procedures should be modified to ensure that suspension and debarment checks are performed on vendors prior to making purchases with federal funds. View of Responsible Official and Planned Corrective Actions - Management agrees with the stated finding and has implemented a corrective action plan.
Department of Treasury, State of Iowa Department of Management, Federal Financial Assistance Listing 21.029, 526659 Coronavirus Capital Projects Fund Procurement, Suspension & Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.318 maintains that recipients must have and use documented procurement policies and must conform procurement standards in sections 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are applicable. Additionally, 2 CFR 200.214 requires recipients to restrict the subawards and contract with certain parities that are debarred, suspended, or excluded from ineligible participation in Federal assistance programs or activities. Condition: Testing of the federal program identified the following: • The Cooperative’s formally documented procurement policy was missing one required element as it relates to the methods of procurement. • One instance where the Cooperative followed a bid process, however, the documentation was not retained to support the selection. Additionally, the contract with the vendor was missing required contract provisions in accordance with Uniform Guidance. • One instance where the Cooperative did not follow the procurement process as detailed in the procurement policy and did not have any formal documentation or contract in place with the vendor. • Two instances where the Cooperative entered into a contract with a vendor over $25,000 and there was no review performed to ensure the vendor was not suspended or debarred. Cause: Contract provisions were not evaluated compared to Uniform Guidance contract requirements. Contracts entered were not evaluated in accordance with Uniform Guidance as it relates to suspension and debarment. Effect: Ineffective controls over this are of compliance could result in a reasonable possibility the Cooperative would be noncompliant with the compliance requirements outlined above. Additionally, the cooperative may enter into a covered transaction with a vendor that is suspended or debarred. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 2 out of 4 vendors were selected for testing. Repeat Finding form Prior Year: No Recommendation: We recommend the Cooperative update their procurement policy to ensure it includes the required elements as it relates to the methods of procurement. In addition, we suggest that management implement procedures and control processes related to the review of contracts to ensure the procurement methods are being followed as it relates to covered transactions and those contracts include the required Uniform Guidance provisions. Also, management should ensure vendors are not suspended or debarred from doing business with the federal government. Views of Responsible Officials: Management agrees with the finding.
Criteria: According to 2 CFR §200.214, nonfederal entities other than states must follow the suspension and debarment standards set out at 2 CFR Part 180, which restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Condition: During our audit of the Organization's federal awards, we identified a deficiency in the grantee’s procurement, suspension, and debarment procedures related to suspension and debarment for 4 of 4 subcontractors we reviewed. Specifically, the grantee did not verify that subcontractors were not excluded or disqualified before entering into transactions expected to exceed $25,000 in accordance with the Uniform Guidance. Cause: The Organization did not have adequate policies and procedures or internal controls in place to ensure compliance with the procurement, suspension, and debarment requirements. Effect: The Organization may be paying subcontractors that are suspended or debarred, which would be unallowable costs. However, none of the 4 subcontractors were suspended or debarred as of the date audit procedures were performed. Recommendation: We recommend that the Organization implement policies and procedures to ensure that all subcontractors and subrecipients of covered transactions are properly verified before entering into transactions, and that this be documented as a control each time it is performed. Views of Responsible Officials: Management agrees with the finding and procedures have been implemented to address the related issues.
Criteria: According to 2 CFR §200.214, nonfederal entities other than states must follow the suspension and debarment standards set out at 2 CFR Part 180, which restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Condition: During our audit of the Organization's federal awards, we identified a deficiency in the grantee’s procurement, suspension, and debarment procedures related to suspension and debarment for 4 of 4 subcontractors we reviewed. Specifically, the grantee did not verify that subcontractors were not excluded or disqualified before entering into transactions expected to exceed $25,000 in accordance with the Uniform Guidance. Cause: The Organization did not have adequate policies and procedures or internal controls in place to ensure compliance with the procurement, suspension, and debarment requirements. Effect: The Organization may be paying subcontractors that are suspended or debarred, which would be unallowable costs. However, none of the 4 subcontractors were suspended or debarred as of the date audit procedures were performed. Recommendation: We recommend that the Organization implement policies and procedures to ensure that all subcontractors and subrecipients of covered transactions are properly verified before entering into transactions, and that this be documented as a control each time it is performed. Views of Responsible Officials: Management agrees with the finding and procedures have been implemented to address the related issues.
FINDING 2024-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2024 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-005. Condition and Context An effective internal control system was not in place at the County to ensure compliance with the requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement The County had not established a purchasing policy that would reflect applicable state laws and regulations, including procedures to avoid acquisition of unnecessary or duplicative items; procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured; and did not maintain written standards of conduct covering conflicts of interest and governing actions of its employees engaged in the selection, award, and administration of contracts. INDIANA STATE BOARD OF ACCOUNTS 20 SHELBY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Suspension and Debarment Prior to entering into subawards and covered transactions with COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The County did not have internal controls in place to ensure compliance with the suspension and debarment compliance requirement. Upon inquiry of the County's policies and procedures related to suspension and debarment requirements, the County stated that they did not have policies or procedures in place for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities. Two covered transactions for goods or services that equaled or exceeded $25,000 that were paid from SLFRF funds during the audit period were identified. Each transaction was examined to determine whether the County verified the suspension and debarment status of either vendor prior to payment. The two covered transactions, totaling $95,122, did not include the appropriate provisions in the contracts nor did the County require a certification or check the EPLS to ensure the entity was not suspended or debarred prior to making payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327." INDIANA STATE BOARD OF ACCOUNTS 21 SHELBY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.214 states: "Recipients and subrecipients are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the County. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors and subrecipients to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Any program funds the County used to pay vendors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls and develop policies and procedures to ensure contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Additionally, we recommended the County establish documented procurement procedures consistent with state and local laws for the acquisition of property or services required under a federal award or subaward. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2024-002 Procurement Policy During our review of the Organization’s procurement policy, we noted that while a general framework exists, the policy does not currently address several key elements required under 2 CFR Part 200 - Uniform Guidance. Specifically, the procurement policy omits critical components related to vendor acceptance, debarment verification, domestic procurement preference, and the detailed processes required for the Simplified Acquisition Threshold. The absence of these elements increases the risk of noncompliance with Federal procurement standards, vendor selection errors, and insufficient documentation in the event of Federal oversight or audit. Federal Agency: Multiple (Various pass-through and direct Federal awards) AL #: Various. Compliance requirement: Audit requirement 2 CFR Part 200 Type of Finding: Noncompliance and significant deficiency in internal control over compliance. Repeat Finding: No. Criteria: According to Uniform Guidance, non-federal entities must establish and follow procurement policies that: Include procedures to verify vendor eligibility through SAM.gov per 2 CFR §200.214. Clearly define procurement methods and thresholds, including the Simplified Acquisition Threshold. Incorporate a domestic preference for procurements per 2 CFR §200.322. Maintain documented procedures for handling procurement disputes, protests, and source evaluations. Cause: The Organization’s procurement policy has not been formally updated to fully incorporate the current Federal requirements as outlined in Uniform Guidance. Effect: Without a fully compliant procurement policy, the Organization is at increased risk of noncompliance with Federal procurement standards, inadvertently contracting with ineligible or debarred vendors and inadequate documentation to support decisions. Questioned Costs: No questioned costs identified. Recommendation: We recommend that management amend and formally update the procurement policy to address the following critical areas: Vendor acceptance and debarment testing, definition and procedures for the Simplified Acquisition Threshold, domestic preference for procurements, procedures for handling procurement issues, and policy governance and version control. Management Response: We appreciate AAFCPAs’ review and agree that our procurement policy requires updates to better align with current federal requirements and internal best practices. To improve clarity, accountability, and regulatory compliance, the Finance Department will work with the Fiscal Sponsorship Department to develop the Organization’s procurement policy going forward. We will ensure the updated policy includes the following: We will formalize procedures to confirm vendor eligibility, including consistent use of the SAM.gov exclusions list prior to entering contracts, and ensure documentation is retained for audit purposes. The updated policy will outline specific steps for procurement activities at various thresholds, particularly mid-range purchases, with requirements for obtaining multiple quotes and documenting price comparisons. In alignment with Federal guidelines, the revised policy will include a provision supporting preference for U.S.-made products and materials when feasible. New sections will be added to address how the Organization will manage vendor selection reviews, disputes, and issue resolution to promote fairness and consistency in the procurement process. To ensure transparency and version control, the policy will include the date of each revision and a process for periodic review. The Fiscal Sponsorship Department will implement the updated policy, coordinate training for programmatic staff, and monitor compliance with the updated procedures. We expect the revised procurement policy to be finalized and implemented by July 31, 2025.
Finding 2024-002 Procurement Policy During our review of the Organization’s procurement policy, we noted that while a general framework exists, the policy does not currently address several key elements required under 2 CFR Part 200 - Uniform Guidance. Specifically, the procurement policy omits critical components related to vendor acceptance, debarment verification, domestic procurement preference, and the detailed processes required for the Simplified Acquisition Threshold. The absence of these elements increases the risk of noncompliance with Federal procurement standards, vendor selection errors, and insufficient documentation in the event of Federal oversight or audit. Federal Agency: Multiple (Various pass-through and direct Federal awards) AL #: Various. Compliance requirement: Audit requirement 2 CFR Part 200 Type of Finding: Noncompliance and significant deficiency in internal control over compliance. Repeat Finding: No. Criteria: According to Uniform Guidance, non-federal entities must establish and follow procurement policies that: Include procedures to verify vendor eligibility through SAM.gov per 2 CFR §200.214. Clearly define procurement methods and thresholds, including the Simplified Acquisition Threshold. Incorporate a domestic preference for procurements per 2 CFR §200.322. Maintain documented procedures for handling procurement disputes, protests, and source evaluations. Cause: The Organization’s procurement policy has not been formally updated to fully incorporate the current Federal requirements as outlined in Uniform Guidance. Effect: Without a fully compliant procurement policy, the Organization is at increased risk of noncompliance with Federal procurement standards, inadvertently contracting with ineligible or debarred vendors and inadequate documentation to support decisions. Questioned Costs: No questioned costs identified. Recommendation: We recommend that management amend and formally update the procurement policy to address the following critical areas: Vendor acceptance and debarment testing, definition and procedures for the Simplified Acquisition Threshold, domestic preference for procurements, procedures for handling procurement issues, and policy governance and version control. Management Response: We appreciate AAFCPAs’ review and agree that our procurement policy requires updates to better align with current federal requirements and internal best practices. To improve clarity, accountability, and regulatory compliance, the Finance Department will work with the Fiscal Sponsorship Department to develop the Organization’s procurement policy going forward. We will ensure the updated policy includes the following: We will formalize procedures to confirm vendor eligibility, including consistent use of the SAM.gov exclusions list prior to entering contracts, and ensure documentation is retained for audit purposes. The updated policy will outline specific steps for procurement activities at various thresholds, particularly mid-range purchases, with requirements for obtaining multiple quotes and documenting price comparisons. In alignment with Federal guidelines, the revised policy will include a provision supporting preference for U.S.-made products and materials when feasible. New sections will be added to address how the Organization will manage vendor selection reviews, disputes, and issue resolution to promote fairness and consistency in the procurement process. To ensure transparency and version control, the policy will include the date of each revision and a process for periodic review. The Fiscal Sponsorship Department will implement the updated policy, coordinate training for programmatic staff, and monitor compliance with the updated procedures. We expect the revised procurement policy to be finalized and implemented by July 31, 2025.
Internal control deficiency and noncompliance over procurement and suspension and debarment. Identification of the federal program: Assistance Listing Number 21.027: • COVID-19 – Coronavirus State and Local Fiscal Recovery Funds • U.S. Department of the Treasury • Federal award identification number – Not Applicable • Federal award year – March 3, 2021 to December 1, 2024 • Pass-through entity – State of Georgia Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303 Internal controls. The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318 General procurement standards (a) the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity’s documented procurement procedures must conform to the procurement standards identified in 200.317 through 200.327; (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders; (c) (1) the non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318 General procurement standards (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.319 Competition (a) All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and 200.320. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.320 Methods of procurement to be followed. The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award: (a) (2) Small purchases – (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity; (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate – (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price; (2) Proposals. A procurement method in which either a fixed price or cost-reimbursement type contract is awarded. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.320 Methods of procurement to be followed. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.324 Contract cost and price. (a) The non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Title 2, Subtitle A, Chapter II, Part 200, Subpart C 200.214 Suspension and debarment. Non-Federal entities are subject to the non-procurement debarment and suspension regulations that restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Title 2, Subtitle A, Chapter I, Part 180, Subpart C 180.300 What must I do before I enter into a covered transaction with another person at the next lower tier? When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) checking SAM Exclusions; (b) Collecting a certification from that person; or (c) adding a clause or condition to the covered transaction with that person. Condition: During our testing over procurement, we observed management did not have documented procurement procedures that conformed to the procurement standards identified in 2 CFR section 200.318 to 200.327 and written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Management did not have internal controls in place over small purchase procurements to ensure price or rate quotations were obtained from an adequate number of qualified sources, formal procurements to ensure sealed bids or proposals were obtained through public advertising, and completion of a cost or price analysis in connection with all procurement actions exceeding the simplified acquisition threshold. Management did not maintain records for procurements to document the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, during our testing over suspension and debarment, we observed management did not have documented suspension and debarment procedures and did not have internal controls in place to ensure vendors were searched for suspension and debarment at the time of vendor selection. Cause: Management did not have internal controls in place over the compliance requirements as stated in the criteria or specific requirement section above. Effect or potential effect: Procurements were not supported by internal controls and could potentially include unreasonable prices or rates. In addition, if a search for suspension and debarment is not conducted, the entity could contract with vendors that are suspended or debarred. Questioned costs: $917,218 – Assistance Listing Number 21.027 – Federal award identification number – Not Applicable Questioned costs were computed as the entire population of procurement transactions subject to small purchase, formal procurement, and suspension and debarment compliance requirements. Questioned costs means an amount, expended or received from a Federal award, that (1) is noncompliant or suspected noncompliant with Federal statutes, regulations, or the terms and conditions of the Federal award or (2) at the time of the audit, lacked adequate documentation to support compliance. Context: During our testing over procurements, we obtained a listing of expenditures that included $917,218 of procurement transactions subject to small purchase, formal procurement, and suspension and debarment compliance requirements. We observed management did not have internal controls in place to ensure the compliance requirements as stated in the criteria or specific requirement section above were performed. Identification as a repeat finding, if applicable: No. Recommendation: Management should create documented procurement procedures that conform to the procurement standards identified in 2 CFR section 200.318 through 200.327 and written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Management should develop and implement internal controls over small purchase procurements to ensure price or rate quotations are obtained from an adequate number of qualified sources, formal procurements to ensure sealed bids or proposals are obtained through public advertising, and completion of a cost or price analysis in connection with all procurement actions exceeding the simplified acquisition threshold. Management should maintain records for procurements to document the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Management should create documented suspension and debarment procedures and develop and implement internal controls to ensure vendors were searched for suspension and debarment at the time of vendor selection. Management should review the procurements identified as questioned costs to identify if any improper payments were made to the entity. Views of responsible officials: We agree with the finding that internal controls were not sufficient to maintain compliance with federal procurement standards under Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318 to 200.327 for a non-federal entity. However, the funds were expended for the intended purpose of the federal award. The Company is committed to implementing internal controls to ensure procurement related to federal awards follow 2 CFR section 200.318 to 200.327. The Company will update the procurement policy to ensure it complies with the requirements of 2 CFR section 200.318 through 200.327, that includes the written standards of conduct covering conflicts of interest, governing the actions of its employees who select, award and administer procurement contracts. This policy will include procedures to ensure proper procurement for small purchases to ensure sufficient price quotations are obtained from the required number of qualified sources, proper sealed bids or proposals are obtained through public advertising, an appropriate cost or price analysis is performed for procurement actions exceeding the simplified acquisition threshold, documentation is retained, and proper oversight is exercised to demonstrate compliance with 2 CFR section 200.318 through 200.327. While the Company did not perform a check of each vendor against the SAM Exclusions prior to selecting a vendor, the Company has procedures in place to ensure the vendors are approved by Corporate purchasing and in good standing, which limits the risk of conflict of interest between employees and vendors, and contracting with a vendor who is suspended or debarred from federal related contracting. Further, the Company confirmed the vendors that were contracted with were not included on the SAM Exclusions listing.
Internal control deficiency and noncompliance over procurement and suspension and debarment. Identification of the federal program: Assistance Listing Number 84.116Z: • Fund for the Improvement of Postsecondary Education • U.S. Department of Education • Federal award identification number – P116Z230323 • Federal award year – June 1, 2023 to May 31, 2026 Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303 Internal controls. The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318 General procurement standards (a) the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity’s documented procurement procedures must conform to the procurement standards identified in 200.317 through 200.327; (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders; (c) (1) the non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318 General procurement standards (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.319 Competition (a) All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and 200.320. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.320 Methods of procurement to be followed. The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award: (a) (2) Small purchases – (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.320 Methods of procurement to be followed. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Title 2, Subtitle A, Chapter II, Part 200, Subpart C 200.214 Suspension and debarment. Non-Federal entities are subject to the non-procurement debarment and suspension regulations that restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Title 2, Subtitle A, Chapter I, Part 180, Subpart C 180.300 What must I do before I enter into a covered transaction with another person at the next lower tier? When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) checking SAM Exclusions; (b) Collecting a certification from that person; or (c) adding a clause or condition to the covered transaction with that person. Condition: During our testing over procurement, we observed management did not have documented procurement procedures that conformed to the procurement standards identified in 2 CFR section 200.318 to 200.327 and written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Management did not have internal controls in place over small purchase procurements to ensure price or rate quotations were obtained from an adequate number of qualified sources. Management did not maintain records for procurements to document the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, during our testing over suspension and debarment, we observed management did not have documented suspension and debarment procedures and did not have internal controls in place to ensure vendors were searched for suspension and debarment at the time of vendor selection. Cause: Management did not have internal controls in place over the compliance requirements as stated in the criteria or specific requirement section above. Effect or potential effect: Procurements were not supported by internal controls and could potentially include unreasonable prices or rates. In addition, if a search for suspension and debarment is not conducted, the entity could contract with vendors that are suspended or debarred. Questioned costs: $153,169 – Assistance Listing Number 84.116Z – Federal award identification number – P116Z230323 Questioned costs were computed as the entire population of procurement transactions subject to small purchase and suspension and debarment compliance requirements. Questioned costs means an amount, expended or received from a Federal award, that (1) is noncompliant or suspected noncompliant with Federal statutes, regulations, or the terms and conditions of the Federal award or (2) at the time of the audit, lacked adequate documentation to support compliance. Context: During our testing over procurements, we obtained a listing of expenditures that included $153,169 of procurement transactions subject to small purchase and suspension and debarment compliance requirements. We observed management did not have internal controls in place to ensure the compliance requirements as stated in the criteria or specific requirement section above were performed. Identification as a repeat finding, if applicable: No. Recommendation: Management should create documented procurement procedures that conform to the procurement standards identified in 2 CFR section 200.318 through 200.327 and written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Management should develop and implement internal controls over small purchase procurements to ensure price or rate quotations are obtained from an adequate number of qualified sources. Management should maintain records for procurements to document the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Management should create documented suspension and debarment procedures and develop and implement internal controls to ensure vendors were searched for suspension and debarment at the time of vendor selection. Management should review the procurements identified as questioned costs to identify if any improper payments were made to the entity. Views of responsible officials: We agree with the finding that internal controls were not sufficient to maintain compliance with federal procurement standards under Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318 to 200.327 for a non-federal entity. However, the funds were expended for the intended purpose of the federal award. The Company is committed to implementing internal controls to ensure procurement related to federal awards follow 2 CFR section 200.318 to 200.327. The Company will update the procurement policy to ensure it complies with the requirements of 2 CFR section 200.318 through 200.327, that includes the written standards of conduct covering conflicts of interest, governing the actions of its employees who select, award and administer procurement contracts. This policy will include procedures to ensure proper procurement for small purchases to ensure sufficient price quotations are obtained from the required number of qualified sources, proper sealed bids or proposals are obtained through public advertising, an appropriate cost or price analysis is performed for procurement actions exceeding the simplified acquisition threshold, documentation is retained, and proper oversight is exercised to demonstrate compliance with 2 CFR section 200.318 through 200.327. While the Company did not perform a check of each vendor against the SAM Exclusions prior to selecting a vendor, the Company has procedures in place to ensure the vendors are approved by Corporate purchasing and in good standing, which limits the risk of conflict of interest between employees and vendors, and contracting with a vendor who is suspended or debarred from federal related contracting. Further, the Company confirmed the vendors that were contracted with were not included on the SAM Exclusions listing.
FINDING 2024-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2024 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 13 CITY OF ATTICA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Nonfederal entities and contractors are subject to nonprocurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in federal assistance programs or activities. Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods or services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. Verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Due to the U.S. Department of the Treasury's determination that the revenue loss eligible use category does not give rise to subawards, the City was only required to comply with suspension and debarment requirements related to covered transactions. The City had not designed or implemented adequate policies and procedures to ensure that applicable vendors and contractors (vendors) who received federal funds in excess of $25,000 were not suspended or debarred from participating in federal award programs. Covered transactions in the amount of $661,128 were made during the audit period to four vendors. There was no evidence of a verification that any of these vendors were not suspended or debarred. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.214 states: "Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 14 CITY OF ATTICA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The City did not have policies and procedures in place to verify that vendors were not suspended or debarred prior to entering into any covered transactions. The Clerk-Treasurer indicated that the City relied on its engineering firm to verify suspension and debarment status of vendors; however, documentation of verification was not provided to or verified by the City. Effect The lack of an effective internal control system enabled material noncompliance to occur and remain undetected. Noncompliance could have led to contracting with vendors who were suspended or debarred from receiving federal grant funds. Additionally, noncompliance with the grant agreement and the compliance requirement could have resulted in the loss of future federal funds to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended the City's management strengthen its system of internal controls and adopt required procurement policies, which would include procedures for verifying vendors' suspension and debarment status prior to entering into the transaction and/or contract if the single or aggregate transactions are expected to exceed $25,000 per fiscal year. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2024 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-005. Condition and Context Suspension and Debarment Prior to entering into subawards and covered transactions with COVID-19 - State and Local Fiscal Recovery Funds (SLFRF), recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Upon inquiring of the County to determine its policies and procedures related to suspension and debarment requirements, the County stated procedures were not in place to ensure vendors were not suspended or debarred prior to entering into covered transactions. One covered transaction totaling $1,003,538 paid with SLFRF grant funds was identified during the audit period. The identified transaction was examined to determine if the County verified the suspension and debarment status of the vendor prior to payment. Upon review, the County had not performed procedures to ensure the vendor was not suspended or debarred, or otherwise excluded or disqualified, from participation in federal assistance programs or activities at any time during the audit period. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.214 states: "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The management of the County did not develop a system of internal controls to ensure that policies and procedures were in place and followed, related to suspension and debarment. Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot ensure the vendor paid was eligible to participate in federal programs. Any program funds the County used to pay vendors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Noncompliance with the provisions of federal regulations and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County establish a system of internal controls to ensure that all vendors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): SWIF 221154-TEMPUR WATER Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-001. Condition and Context Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods or services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. Verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Due to the U.S. Department of the Treasury's determination that the revenue loss eligible use category does not give rise to subawards, the County was only required to comply with suspension and debarment requirements related to covered transactions. Covered transactions in the amount of $3,600,147 were made during the audit period to two vendors. For one of the two vendors, the County did not check the ELPS, collect a certification from the vendor, or add a clause in a contract with the vendor. Although the County established Ordinance 2023-11 dated August 14, 2023, requiring all public works contracts to contain a suspension and debarment clause, the contract with the vendor was entered into prior to the establishment of the ordinance. The contract was not amended nor was one of the other two methods for verification of the suspension and debarment status of the vendor performed. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.214 states: "Recipients and subrecipients are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A new policy was adopted to ensure compliance with suspension and debarment requirements after the County's 2023 audit. The new policy was not implemented for all applicable contracts entered into prior to the policy's enactment, and the alternative methods of verification were not performed to ensure compliance with suspension and debarment requirements. Effect Without proper implementation of an effectively designed system of internal controls, the County was unable to verify whether contractors and subrecipients were not suspended, debarred, or excluded. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Furthermore, noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls to ensure that the current policy in place was properly implemented for all beneficiaries that are paid $25,000 or more, all or in part with federal funds, to ensure they are not suspended, debarred, or otherwise excluded from participating in federal programs. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Department of Treasury, State of Iowa Chief Information Officer, Federal Financial Assistance Listing 21.027, NOFO #007 – 433524,433385, 2024 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension & Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.318 maintains that recipients must have and use documented procurement policies and must conform procurement standards in sections 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are applicable. Additionally, 2 CFR 200.214 requires recipients to restrict the subawards and contract with certain parities that are debarred, suspended, or excluded from participation in Federal assistance programs or activities. Condition: Testing of the federal program identified the following: - One instance where the Cooperative followed a bid process, however, the documentation was not retained to support the selection. Additionally, the contract with the vendor was missing required contract provisions in accordance with Uniform Guidance. - Two instances where the Cooperative did not follow the procurement process as detailed in the procurement policy and did not have any formal documentation or contract in place with the vendor. - Three instances where the Cooperative entered into a contract with a vendor over $25,000 and there was no review performed to ensure the vendor was not suspended or debarred. Cause: Contract provisions were not evaluated compared to Uniform Guidance contract requirements. Contracts entered were not evaluated in accordance with Uniform Guidance as it relates to suspension and debarment. Effect: Ineffective controls over this area of compliance could result in a reasonable possibility the Cooperative would be noncompliant with the compliance requirements outlined above. Additionally, the cooperative may enter into a covered transaction with a vendor that is suspended or debarred. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 3 out of 5 vendors were selected for testing. Repeat Finding from Prior Year: No Recommendation: We recommend that management implement procedures related to the review of contracts to ensure the procurement methods are being followed and to ensure contracts include the required Uniform Guidance provisions. Also, management should incorporate procedures to ensure vendors are not suspended or debarred from doing business with the federal government. Documentation should be retained to provide evidence that procedures were completed. Views of Responsible Officials: Management agrees with the finding.