2023-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Child Nutrition Cluster (IDEA) – ALN 10.553, 10.555 & 10.559 Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Suspension and debarment compliance was not verified for six covered transactions. Cause: Lack of appropriate oversight resulted in required suspension and debarment checks not being performed. Effect: Grant transactions are not supported adequately, and the School is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. It was determined that none of the three vendors were suspended or debarred from federal awards. Questioned Costs: None Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to document that all contractors under covered transactions that are performing services for the grant are not suspended or debarred. Views of Responsible Official: Management agrees with the finding.
2023-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Child Nutrition Cluster (IDEA) – ALN 10.553, 10.555 & 10.559 Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Suspension and debarment compliance was not verified for six covered transactions. Cause: Lack of appropriate oversight resulted in required suspension and debarment checks not being performed. Effect: Grant transactions are not supported adequately, and the School is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. It was determined that none of the three vendors were suspended or debarred from federal awards. Questioned Costs: None Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to document that all contractors under covered transactions that are performing services for the grant are not suspended or debarred. Views of Responsible Official: Management agrees with the finding.
2023-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Child Nutrition Cluster (IDEA) – ALN 10.553, 10.555 & 10.559 Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Suspension and debarment compliance was not verified for six covered transactions. Cause: Lack of appropriate oversight resulted in required suspension and debarment checks not being performed. Effect: Grant transactions are not supported adequately, and the School is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. It was determined that none of the three vendors were suspended or debarred from federal awards. Questioned Costs: None Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to document that all contractors under covered transactions that are performing services for the grant are not suspended or debarred. Views of Responsible Official: Management agrees with the finding.
2023-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Child Nutrition Cluster (IDEA) – ALN 10.553, 10.555 & 10.559 Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Suspension and debarment compliance was not verified for six covered transactions. Cause: Lack of appropriate oversight resulted in required suspension and debarment checks not being performed. Effect: Grant transactions are not supported adequately, and the School is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. It was determined that none of the three vendors were suspended or debarred from federal awards. Questioned Costs: None Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to document that all contractors under covered transactions that are performing services for the grant are not suspended or debarred. Views of Responsible Official: Management agrees with the finding.
2023-004 – Procurement, Suspension and Debarment Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; Illinois Criminal Justice Information Authority Pass-Through Number(s): 20220246 - 2023; 20220245 - 2023; 822007 - 2023 Award Period: 3/1/22-12/31/23; 3/1/22-12/31/23; 3/1/22-12/31/24; 4/1/22-6/30/23 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: CFR § 200.320 indicates the various 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 approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. § 200.214 Suspension and debarment indicates 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. Condition: The Organization did not have a procurement policy or suspension and debarment policy in place which was consistent with the requirements of the Uniform Guidance. As a result, the Organization could not provide supporting documentation showing that engaged vendors had gone through an appropriate procurement process. Questioned costs: N/A Context: 5 of 5 vendors selected for procurement testing, did not have documentation showing that the cost had been procured in accordance with the Uniform Guidance. Additionally, 2 of 2 vendors selected for testing suspension and debarment, did not have documentation showing that suspension and debarment had been checked prior to entering into a contract. Cause: Error by management in understanding Uniform Guidance requirements. Effect: Lack of appropriate procurement, suspension and debarment policies could result in the Organization engaging vendors who are debarred from doing business with the United States Government and/or using federal funds in manner that is not the most efficient or economical. Repeat Finding: No Recommendation: We recommend the Organization revised its internal controls related to procurement, suspension and debarment such that they align with the requirements of the Uniform Guidance. Views of responsible officials: The Organization is in the process of developing a procurement policy and suspension and debarment policies that aligns with Uniform Guidance.
2023-004 – Procurement, Suspension and Debarment Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; Illinois Criminal Justice Information Authority Pass-Through Number(s): 20220246 - 2023; 20220245 - 2023; 822007 - 2023 Award Period: 3/1/22-12/31/23; 3/1/22-12/31/23; 3/1/22-12/31/24; 4/1/22-6/30/23 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: CFR § 200.320 indicates the various 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 approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. § 200.214 Suspension and debarment indicates 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. Condition: The Organization did not have a procurement policy or suspension and debarment policy in place which was consistent with the requirements of the Uniform Guidance. As a result, the Organization could not provide supporting documentation showing that engaged vendors had gone through an appropriate procurement process. Questioned costs: N/A Context: 5 of 5 vendors selected for procurement testing, did not have documentation showing that the cost had been procured in accordance with the Uniform Guidance. Additionally, 2 of 2 vendors selected for testing suspension and debarment, did not have documentation showing that suspension and debarment had been checked prior to entering into a contract. Cause: Error by management in understanding Uniform Guidance requirements. Effect: Lack of appropriate procurement, suspension and debarment policies could result in the Organization engaging vendors who are debarred from doing business with the United States Government and/or using federal funds in manner that is not the most efficient or economical. Repeat Finding: No Recommendation: We recommend the Organization revised its internal controls related to procurement, suspension and debarment such that they align with the requirements of the Uniform Guidance. Views of responsible officials: The Organization is in the process of developing a procurement policy and suspension and debarment policies that aligns with Uniform Guidance.
2023-004 – Procurement, Suspension and Debarment Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; Illinois Criminal Justice Information Authority Pass-Through Number(s): 20220246 - 2023; 20220245 - 2023; 822007 - 2023 Award Period: 3/1/22-12/31/23; 3/1/22-12/31/23; 3/1/22-12/31/24; 4/1/22-6/30/23 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: CFR § 200.320 indicates the various 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 approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. § 200.214 Suspension and debarment indicates 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. Condition: The Organization did not have a procurement policy or suspension and debarment policy in place which was consistent with the requirements of the Uniform Guidance. As a result, the Organization could not provide supporting documentation showing that engaged vendors had gone through an appropriate procurement process. Questioned costs: N/A Context: 5 of 5 vendors selected for procurement testing, did not have documentation showing that the cost had been procured in accordance with the Uniform Guidance. Additionally, 2 of 2 vendors selected for testing suspension and debarment, did not have documentation showing that suspension and debarment had been checked prior to entering into a contract. Cause: Error by management in understanding Uniform Guidance requirements. Effect: Lack of appropriate procurement, suspension and debarment policies could result in the Organization engaging vendors who are debarred from doing business with the United States Government and/or using federal funds in manner that is not the most efficient or economical. Repeat Finding: No Recommendation: We recommend the Organization revised its internal controls related to procurement, suspension and debarment such that they align with the requirements of the Uniform Guidance. Views of responsible officials: The Organization is in the process of developing a procurement policy and suspension and debarment policies that aligns with Uniform Guidance.
2023-004 – Procurement, Suspension and Debarment Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; Illinois Criminal Justice Information Authority Pass-Through Number(s): 20220246 - 2023; 20220245 - 2023; 822007 - 2023 Award Period: 3/1/22-12/31/23; 3/1/22-12/31/23; 3/1/22-12/31/24; 4/1/22-6/30/23 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: CFR § 200.320 indicates the various 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 approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. § 200.214 Suspension and debarment indicates 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. Condition: The Organization did not have a procurement policy or suspension and debarment policy in place which was consistent with the requirements of the Uniform Guidance. As a result, the Organization could not provide supporting documentation showing that engaged vendors had gone through an appropriate procurement process. Questioned costs: N/A Context: 5 of 5 vendors selected for procurement testing, did not have documentation showing that the cost had been procured in accordance with the Uniform Guidance. Additionally, 2 of 2 vendors selected for testing suspension and debarment, did not have documentation showing that suspension and debarment had been checked prior to entering into a contract. Cause: Error by management in understanding Uniform Guidance requirements. Effect: Lack of appropriate procurement, suspension and debarment policies could result in the Organization engaging vendors who are debarred from doing business with the United States Government and/or using federal funds in manner that is not the most efficient or economical. Repeat Finding: No Recommendation: We recommend the Organization revised its internal controls related to procurement, suspension and debarment such that they align with the requirements of the Uniform Guidance. Views of responsible officials: The Organization is in the process of developing a procurement policy and suspension and debarment policies that aligns with Uniform Guidance.
CONDITION: In connection with the Cambria Heights School District’s RTU Replacement Project, the District did not perform debarment and suspension checks for contractors through SAM.gov. This is a repeat finding (2022-009) from the previous fiscal year. CRITERIA: In accordance with Section 2 CFR 200.214 of the Uniform Guidance, the District is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict the awarding of contracts to certain parties that are debarred, suspended, or otherwise ineligible to participate in federal assistance programs. CAUSE: School District personnel were unaware that there was a website available to assist them in determining if a contractor/vendor was determined to be debarred or suspended from participating in federal assistance programs. EFFECT: The Cambria Heights School District did not comply with the requirements of Section 2 CFR 200.214 of the Uniform Guidance regarding the procedure required to determine whether a contractor/vendor was debarred or suspended from participating in federal assistance programs. QUESTIONED COST: Hranec Sheet Metal, Inc. - $1,058,759, Westmoreland Electric Services – $92,163. RECOMMENDATION: I am recommending that the management of the School District utilize the SAM.gov website for determining whether contractors/vendors are debarred or suspended from participating in federal assistance programs on all future applicable contract awards to ensure compliance with Section 2 CFR 200.214 of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: In connection with the Cambria Heights School District’s RTU Replacement Project, the District did not perform debarment and suspension checks for contractors through SAM.gov. This is a repeat finding (2022-009) from the previous fiscal year. CRITERIA: In accordance with Section 2 CFR 200.214 of the Uniform Guidance, the District is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict the awarding of contracts to certain parties that are debarred, suspended, or otherwise ineligible to participate in federal assistance programs. CAUSE: School District personnel were unaware that there was a website available to assist them in determining if a contractor/vendor was determined to be debarred or suspended from participating in federal assistance programs. EFFECT: The Cambria Heights School District did not comply with the requirements of Section 2 CFR 200.214 of the Uniform Guidance regarding the procedure required to determine whether a contractor/vendor was debarred or suspended from participating in federal assistance programs. QUESTIONED COST: Hranec Sheet Metal, Inc. - $1,058,759, Westmoreland Electric Services – $92,163. RECOMMENDATION: I am recommending that the management of the School District utilize the SAM.gov website for determining whether contractors/vendors are debarred or suspended from participating in federal assistance programs on all future applicable contract awards to ensure compliance with Section 2 CFR 200.214 of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: In connection with the Cambria Heights School District’s RTU Replacement Project, the District did not perform debarment and suspension checks for contractors through SAM.gov. This is a repeat finding (2022-009) from the previous fiscal year. CRITERIA: In accordance with Section 2 CFR 200.214 of the Uniform Guidance, the District is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict the awarding of contracts to certain parties that are debarred, suspended, or otherwise ineligible to participate in federal assistance programs. CAUSE: School District personnel were unaware that there was a website available to assist them in determining if a contractor/vendor was determined to be debarred or suspended from participating in federal assistance programs. EFFECT: The Cambria Heights School District did not comply with the requirements of Section 2 CFR 200.214 of the Uniform Guidance regarding the procedure required to determine whether a contractor/vendor was debarred or suspended from participating in federal assistance programs. QUESTIONED COST: Hranec Sheet Metal, Inc. - $1,058,759, Westmoreland Electric Services – $92,163. RECOMMENDATION: I am recommending that the management of the School District utilize the SAM.gov website for determining whether contractors/vendors are debarred or suspended from participating in federal assistance programs on all future applicable contract awards to ensure compliance with Section 2 CFR 200.214 of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: In connection with the Cambria Heights School District’s RTU Replacement Project, the District did not perform debarment and suspension checks for contractors through SAM.gov. This is a repeat finding (2022-009) from the previous fiscal year. CRITERIA: In accordance with Section 2 CFR 200.214 of the Uniform Guidance, the District is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict the awarding of contracts to certain parties that are debarred, suspended, or otherwise ineligible to participate in federal assistance programs. CAUSE: School District personnel were unaware that there was a website available to assist them in determining if a contractor/vendor was determined to be debarred or suspended from participating in federal assistance programs. EFFECT: The Cambria Heights School District did not comply with the requirements of Section 2 CFR 200.214 of the Uniform Guidance regarding the procedure required to determine whether a contractor/vendor was debarred or suspended from participating in federal assistance programs. QUESTIONED COST: Hranec Sheet Metal, Inc. - $1,058,759, Westmoreland Electric Services – $92,163. RECOMMENDATION: I am recommending that the management of the School District utilize the SAM.gov website for determining whether contractors/vendors are debarred or suspended from participating in federal assistance programs on all future applicable contract awards to ensure compliance with Section 2 CFR 200.214 of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: In connection with the Cambria Heights School District’s RTU Replacement Project, the District did not perform debarment and suspension checks for contractors through SAM.gov. This is a repeat finding (2022-009) from the previous fiscal year. CRITERIA: In accordance with Section 2 CFR 200.214 of the Uniform Guidance, the District is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict the awarding of contracts to certain parties that are debarred, suspended, or otherwise ineligible to participate in federal assistance programs. CAUSE: School District personnel were unaware that there was a website available to assist them in determining if a contractor/vendor was determined to be debarred or suspended from participating in federal assistance programs. EFFECT: The Cambria Heights School District did not comply with the requirements of Section 2 CFR 200.214 of the Uniform Guidance regarding the procedure required to determine whether a contractor/vendor was debarred or suspended from participating in federal assistance programs. QUESTIONED COST: Hranec Sheet Metal, Inc. - $1,058,759, Westmoreland Electric Services – $92,163. RECOMMENDATION: I am recommending that the management of the School District utilize the SAM.gov website for determining whether contractors/vendors are debarred or suspended from participating in federal assistance programs on all future applicable contract awards to ensure compliance with Section 2 CFR 200.214 of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
2023-006 Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must 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 statues, regulations, and the terms and conditions of the Federal award. Title 2 CFR Section 200.214 of the Uniform Guidance states that the City must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restricts 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. Per 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. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Service Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. Condition: During our testing of the City’s provisions for procurement requirements under the COVID-19 Coronavirus State and Local Fiscal Recovery Funds, we noted for three (3) of four (4) contracts selecting for testing there was no evidence that the City verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract. Cause: The City did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The City’s control was not consistently followed, which required verification of suspension or debarment prior to entering the contract. Subsequent to entering into the contract, management verified the vendors were not suspended or debarred. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of four (4) out of twelve (12) procurement contracts were sampled for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds. Repeat Finding from Prior Year: No Recommendation: We recommend the City adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Views of Responsible Officials: Management agrees with the finding. See separate corrective action plan.
Finding 2023-048: U.S. Department of Health and Human Services ALN #93.423, 1332 State Innovation Waivers Grant #SIWIW200014 Criteria: Federal regulations, 2 CFR 200.214 and 2 CFR 180.300, require the State Auditor’s Office (office) to restrict subawards to parties not suspended or debarred from receiving federal funds. The 1332 State Innovation Waivers (waiver program) compliance supplement further requires the office to review the office to review the System for Award Management (SAM) website annually for its subrecipients. Federal regulation, 2 CFR 25.300, specifies subwards may not be made unless the subrecipient has obtained and provides its Unique Entity Identified (UEI) to the Federal grant recipient. Federal regulation, 2 CFR 170 Appendix A, states the Federal grant recipient must report each action that obligates federal funds to a subrecipient that equals or exceeds $30,000. Each obligating action must be reported to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) by the end of the month following the month in which the decision was made. Federal regulation, 2 CFR 200.303, requires non-Federal entities to, among other things, 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. Condition: The office did not have adequate controls to identify all requirements related to its subaward under the waiver program, including the requirement to communicate specific information to its subrecipient, the Montana Reinsurance Association. Additionally, the office did not comply with suspension and debarment and reporting requirements applicable to the waiver program, as follows: • The office did not check the SAM excluded party list for suspensions and debarments and retain evidence of its review before issuing any subaward payments. Additionally, contrary to federal regulations, the office made subaward payments to the MRA prior to receiving its UEI. • The office did not submit reports for subaward information as required under FFATA. Questioned Costs: No questioned costs identified. Context: There is a single subrecipient for the waiver program. The office did not check the suspended or debarred status of the subrecipient during the audit period. Additionally, the office did not submit the required FFATA reports for $47.5 million in subwards made during fiscal years 2022 and 2023. We brought the internal control and compliance issues to the office’s attention in April 2023. As of June 14, 2023, the office updated its Annual Calendar used to track reporting and monitoring requirements. On this version of its Annual Calendar, the office scheduled an annual check of the SAM site for October 2023, but FFATA reporting was not yet incorporated into the calendar. On July 13, 2023, the office added FFATA reports to its Annual Calendar. Additionally, as of June 30, 2023, the office had neither checked the SAM excluded party listing nor obtained the MRA’s UEI. Between May and June 2023, the office incurred costs associated with the MRA totaling $283,334 in federal funds. Effect: The office has not complied with all elements of the Suspension and Debarment and Reporting compliance requirements. Internal control weaknesses also put the office at risk of additional noncompliance. Cause: While the office treated the MRA as its subrecipient in some respects, the office did not identify the need to treat the MRA as a subrecipient for all related requirements. The office relied on federal guidance provided when the state’s waiver was approved in 2019, which included the Specific Terms and Conditions. However, the office did not consider other requirements outlined in the federal Compliance Supplement for the waiver program, available as of August 2019 and at recurring intervals since that time, when determining procedures necessary to comply with all federal compliance requirements. Recommendation: We recommend the State Auditor’s Office: A. Enhance internal controls to monitor the excluded parties list, disclose all required information to its subrecipient, and complete required Federal Funding Accountability and Transparency Act reports. B. Comply with federal suspension and debarment requirements to review the SAM website prior to making subaward payments and to make subawards only to entities with a Unique Entity Identifier. C. Submit required Federal Funding Accountability and Transparency Act reports. Views of Responsible Officials: The office concurs with this recommendation. For more information on the office’s planned corrective action see the Corrective Action Plan starting on page D-1.
Finding 2023-048: U.S. Department of Health and Human Services ALN #93.423, 1332 State Innovation Waivers Grant #SIWIW200014 Criteria: Federal regulations, 2 CFR 200.214 and 2 CFR 180.300, require the State Auditor’s Office (office) to restrict subawards to parties not suspended or debarred from receiving federal funds. The 1332 State Innovation Waivers (waiver program) compliance supplement further requires the office to review the office to review the System for Award Management (SAM) website annually for its subrecipients. Federal regulation, 2 CFR 25.300, specifies subwards may not be made unless the subrecipient has obtained and provides its Unique Entity Identified (UEI) to the Federal grant recipient. Federal regulation, 2 CFR 170 Appendix A, states the Federal grant recipient must report each action that obligates federal funds to a subrecipient that equals or exceeds $30,000. Each obligating action must be reported to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) by the end of the month following the month in which the decision was made. Federal regulation, 2 CFR 200.303, requires non-Federal entities to, among other things, 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. Condition: The office did not have adequate controls to identify all requirements related to its subaward under the waiver program, including the requirement to communicate specific information to its subrecipient, the Montana Reinsurance Association. Additionally, the office did not comply with suspension and debarment and reporting requirements applicable to the waiver program, as follows: • The office did not check the SAM excluded party list for suspensions and debarments and retain evidence of its review before issuing any subaward payments. Additionally, contrary to federal regulations, the office made subaward payments to the MRA prior to receiving its UEI. • The office did not submit reports for subaward information as required under FFATA. Questioned Costs: No questioned costs identified. Context: There is a single subrecipient for the waiver program. The office did not check the suspended or debarred status of the subrecipient during the audit period. Additionally, the office did not submit the required FFATA reports for $47.5 million in subwards made during fiscal years 2022 and 2023. We brought the internal control and compliance issues to the office’s attention in April 2023. As of June 14, 2023, the office updated its Annual Calendar used to track reporting and monitoring requirements. On this version of its Annual Calendar, the office scheduled an annual check of the SAM site for October 2023, but FFATA reporting was not yet incorporated into the calendar. On July 13, 2023, the office added FFATA reports to its Annual Calendar. Additionally, as of June 30, 2023, the office had neither checked the SAM excluded party listing nor obtained the MRA’s UEI. Between May and June 2023, the office incurred costs associated with the MRA totaling $283,334 in federal funds. Effect: The office has not complied with all elements of the Suspension and Debarment and Reporting compliance requirements. Internal control weaknesses also put the office at risk of additional noncompliance. Cause: While the office treated the MRA as its subrecipient in some respects, the office did not identify the need to treat the MRA as a subrecipient for all related requirements. The office relied on federal guidance provided when the state’s waiver was approved in 2019, which included the Specific Terms and Conditions. However, the office did not consider other requirements outlined in the federal Compliance Supplement for the waiver program, available as of August 2019 and at recurring intervals since that time, when determining procedures necessary to comply with all federal compliance requirements. Recommendation: We recommend the State Auditor’s Office: A. Enhance internal controls to monitor the excluded parties list, disclose all required information to its subrecipient, and complete required Federal Funding Accountability and Transparency Act reports. B. Comply with federal suspension and debarment requirements to review the SAM website prior to making subaward payments and to make subawards only to entities with a Unique Entity Identifier. C. Submit required Federal Funding Accountability and Transparency Act reports. Views of Responsible Officials: The office concurs with this recommendation. For more information on the office’s planned corrective action see the Corrective Action Plan starting on page D-1.
Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster Assistance Listing Number: 84.027, 84.173 Pass-Through Agency: Massachusetts Department of Revenue Pass-Through Number: MA DESE Codes 240, 252, 262, 264 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance Compliance Requirement: Suspension and Debarment Criteria or Specific Requirement: The Code of Federal Regulations (CFR) Title 2 Part 200.214 states that nonfederal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations 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. Nonfederal entities must verify that contracts with certain parties are not debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition and Context: For the 1 vendor in our testing sample, the Town did not document verification that the vendor was not suspended or debarred from participation in Federal assistance programs or activities. The vendor in our audit sample was not suspended or debarred. Questioned Costs: None. Cause: Procedures were not in place to document the verification that all vendors were not suspended or debarred from participation in Federal assistance programs or activities. Effect: While this did not occur in the instances identified in this finding, lack of verification of vendors’ debarment or suspension status could cause federal grant funds to be expended with vendors that are excluded from participation in Federal assistance programs or activities. Repeat Finding: No. Recommendation: We recommend the Town enhance procedures and controls to ensure verifications of suspension and debarment statuses are obtained and documented prior to executing transactions with vendors. Views of Responsible Officials: Management agrees with the finding.
Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster Assistance Listing Number: 84.027, 84.173 Pass-Through Agency: Massachusetts Department of Revenue Pass-Through Number: MA DESE Codes 240, 252, 262, 264 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance Compliance Requirement: Suspension and Debarment Criteria or Specific Requirement: The Code of Federal Regulations (CFR) Title 2 Part 200.214 states that nonfederal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations 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. Nonfederal entities must verify that contracts with certain parties are not debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition and Context: For the 1 vendor in our testing sample, the Town did not document verification that the vendor was not suspended or debarred from participation in Federal assistance programs or activities. The vendor in our audit sample was not suspended or debarred. Questioned Costs: None. Cause: Procedures were not in place to document the verification that all vendors were not suspended or debarred from participation in Federal assistance programs or activities. Effect: While this did not occur in the instances identified in this finding, lack of verification of vendors’ debarment or suspension status could cause federal grant funds to be expended with vendors that are excluded from participation in Federal assistance programs or activities. Repeat Finding: No. Recommendation: We recommend the Town enhance procedures and controls to ensure verifications of suspension and debarment statuses are obtained and documented prior to executing transactions with vendors. Views of Responsible Officials: Management agrees with the finding.
Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster Assistance Listing Number: 84.027, 84.173 Pass-Through Agency: Massachusetts Department of Revenue Pass-Through Number: MA DESE Codes 240, 252, 262, 264 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance Compliance Requirement: Suspension and Debarment Criteria or Specific Requirement: The Code of Federal Regulations (CFR) Title 2 Part 200.214 states that nonfederal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations 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. Nonfederal entities must verify that contracts with certain parties are not debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition and Context: For the 1 vendor in our testing sample, the Town did not document verification that the vendor was not suspended or debarred from participation in Federal assistance programs or activities. The vendor in our audit sample was not suspended or debarred. Questioned Costs: None. Cause: Procedures were not in place to document the verification that all vendors were not suspended or debarred from participation in Federal assistance programs or activities. Effect: While this did not occur in the instances identified in this finding, lack of verification of vendors’ debarment or suspension status could cause federal grant funds to be expended with vendors that are excluded from participation in Federal assistance programs or activities. Repeat Finding: No. Recommendation: We recommend the Town enhance procedures and controls to ensure verifications of suspension and debarment statuses are obtained and documented prior to executing transactions with vendors. Views of Responsible Officials: Management agrees with the finding.
Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster Assistance Listing Number: 84.027, 84.173 Pass-Through Agency: Massachusetts Department of Revenue Pass-Through Number: MA DESE Codes 240, 252, 262, 264 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance Compliance Requirement: Suspension and Debarment Criteria or Specific Requirement: The Code of Federal Regulations (CFR) Title 2 Part 200.214 states that nonfederal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations 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. Nonfederal entities must verify that contracts with certain parties are not debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition and Context: For the 1 vendor in our testing sample, the Town did not document verification that the vendor was not suspended or debarred from participation in Federal assistance programs or activities. The vendor in our audit sample was not suspended or debarred. Questioned Costs: None. Cause: Procedures were not in place to document the verification that all vendors were not suspended or debarred from participation in Federal assistance programs or activities. Effect: While this did not occur in the instances identified in this finding, lack of verification of vendors’ debarment or suspension status could cause federal grant funds to be expended with vendors that are excluded from participation in Federal assistance programs or activities. Repeat Finding: No. Recommendation: We recommend the Town enhance procedures and controls to ensure verifications of suspension and debarment statuses are obtained and documented prior to executing transactions with vendors. Views of Responsible Officials: Management agrees with the finding.
Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: Unknown Award Period: March 3, 2021 – December 31, 2026 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The Town should have internal controls designed to ensure compliance with those provisions. 2 CFR section 200.214 requires compliance with suspension and debarment standards. Condition: No supporting documentation was maintained to support the vendor was not suspended or debarred. We confirmed that the vendors were not suspended or debarred. Questioned costs: None. Context: 2 of the 2 vendors tested. Cause: Procedures are not in place to maintain documentation verifying vendors are not suspended or debarred. Effect: Potential noncompliance with federal procurement, suspension, and debarment compliance requirements. Recommendation: We recommend the Town implement control to ensure adherence to the suspension and debarment requirements of the Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.
LACK OF PROCEDURES TO ENSURE PROPER SUSPENSION AND DEBARMENT REQUIREMENTS Program: AL 21.027 – COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Suspension & Debarment Grant: SLFRP0923, March 3, 2021, through December 31, 2024 Federal Grantor: U.S. Department of the Treasury Criteria: Title 2 of the U.S. Code of Federal Regulations (CFR) § 200.303 (January 1, 2023) states the following, in relevant part: The non-Federal entity must: 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). The U.S. Department of the Treasury adopted the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR § 1000.10 (January 1, 2023), which states the following: Except for the deviations set forth elsewhere in this Part, the Department of the Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, set forth at 2 CFR part 200. 2 CFR § 200.214 (January 1, 2023) states the following: 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. 2 CFR § 180.300 (January 1, 2023) requires non-Federal entities to verify that an entity is not excluded or disqualified prior to entering into a covered transaction by: “(a) Checking SAM Exclusions; or (b) Collecting a certification from that . . . [entity]; or (c) Adding a clause or condition to the covered transaction with that . . . [entity].” A good internal control plan requires the County to have proper procedures in place to verify that contractors paid with Federal funds are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities. Condition: The County did not have controls in place to ensure that suspension and debarment requirements were followed and adequately documented. We noted the County used Coronavirus State and Local Fiscal Recovery Funds to pay eleven vendors over $25,000 each, totaling $1,436,244, during the fiscal year ended June 30, 2023. The County failed to ensure that these vendors were not excluded or disqualified prior to entering into these covered transactions. Context: The County did not have a system in place to ensure proper application of the federal guidelines for the federal disbursements. Effect: Without adequate procedures to ensure contractors are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, there is an increased risk for the misuse of Federal funds and noncompliance with Federal regulations, leading to possible Federal sanctions. Cause: Lack of procedures and knowledge regarding suspension and debarment requirements. Questioned Costs: None Repeat Finding: No Recommendation: We recommend the County implement procedures to ensure, prior to entering into a covered transaction, that a contractor is not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, and those procedures are adequately documented. View of Officials: The County will implement procedures to ensure when a contractor is paid with federal funds, sam.gov will be utilized to verify the entity has not been suspended or debarred and such procedure will be adequately documented.
Compliance - Per 2 CFR section 200.318, when procuring property, the non-Federal entity must have and use documented procurement procedures, consistent with States, for the acquisition of property or services required under a Federal award or subaward. Compliance - Per 2 CFR 200.214, restricts 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 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person (c) Adding a clause or condition to the covered transaction with that person. Control - Per 2 CFR 200.303(a), a non-Federal entity must: 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 comply 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). Condition The City was unable to provide documentation to support compliance with the required State procurement processes for acquiring property or services. In addition, the City did not provide support that the suspension and debarment status of the vendor was checked before the contract was awarded. Context For all contracts selected for testing, no support was provided for how the contract was procured. Further, the suspension and debarment status of the vendor was not documented for that contract. Questioned Costs Undetermined. Cause The City’s internal controls were not sufficient to ensure that applicable procurement policies and Federal suspension and debarment regulations were followed for purchased made for the program. Effect The City is not compliant with federal and state procurement and suspension and debarment requirements. Failure to adhere to procurement and suspension and debarment policies and procedures may result in obtaining goods and services under terms that are not in the best interest of the Federal program. Recommendation The City should review and enhance controls and procedures to ensure that it follows the applicable procurement policy and Federal suspension and debarment regulations for all goods and services charged to the program. Views of responsible officials We agree with the auditor’s recommendation. The City of Harrington, Delaware will review the State’s procurement process to satisfy the compliance requirements for the program. The City of Harrington, Delaware will also put procedures in place to check and review each bidder as part of the Federal suspension and debarment policies.
Criteria Compliance - Per 2 CFR section 200.318, when procuring property, the non-Federal entity must have and use documented procurement procedures, consistent with States, for the acquisition of property or services required under a Federal award or subaward. Compliance - Per 2 CFR 200.214, restricts 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 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person (c) Adding a clause or condition to the covered transaction with that person. Control - Per 2 CFR 200.303(a), a non-Federal entity must: 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 comply 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). Condition The City was unable to provide documentation to support compliance with the required State procurement processes for acquiring property or services. In addition, the City did not provide support that the suspension and debarment status of the vendor was checked before the contract was awarded. Context For all contracts selected for testing, no support was provided for how the contract was procured. Further, the suspension and debarment status of the vendor was not documented for that contract. Questioned Costs Undetermined. Cause The City’s internal controls were not sufficient to ensure that applicable procurement policies and Federal suspension and debarment regulations were followed for purchased made for the program. Effect The City is not compliant with federal and state procurement and suspension and debarment requirements. Failure to adhere to procurement and suspension and debarment policies and procedures may result in obtaining goods and services under terms that are not in the best interest of the Federal program. Recommendation The City should review and enhance controls and procedures to ensure that it follows the applicable procurement policy and Federal suspension and debarment regulations for all goods and services charged to the program. Views of responsible officials We agree with the auditor’s recommendation. The City of Harrington, Delaware will review the State’s procurement process to satisfy the compliance requirements for the program. The City of Harrington, Delaware will also put procedures in place to check and review each bidder as part of the Federal suspension and debarment policies
Criteria Compliance - Per 2 CFR section 200.318, when procuring property, the non-Federal entity must have and use documented procurement procedures, consistent with States, for the acquisition of property or services required under a Federal award or subaward. Compliance - Per 2 CFR 200.214, restricts 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 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person (c) Adding a clause or condition to the covered transaction with that person. Control - Per 2 CFR 200.303(a), a non-Federal entity must: 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 comply 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). Condition The City was unable to provide documentation to support compliance with the required State procurement processes for acquiring property or services. In addition, the City did not provide support that the suspension and debarment status of the vendor was checked before the contract was awarded. Context For all contracts selected for testing, no support was provided for how the contract was procured. Further, the suspension and debarment status of the vendor was not documented for that contract. Questioned Costs Undetermined. Cause The City’s internal controls were not sufficient to ensure that applicable procurement policies and Federal suspension and debarment regulations were followed for purchased made for the program. Effect The City is not compliant with federal and state procurement and suspension and debarment requirements. Failure to adhere to procurement and suspension and debarment policies and procedures may result in obtaining goods and services under terms that are not in the best interest of the Federal program. Recommendation The City should review and enhance controls and procedures to ensure that it follows the applicable procurement policy and Federal suspension and debarment regulations for all goods and services charged to the program. Views of responsible officials We agree with the auditor’s recommendation. The City of Harrington, Delaware will review the State’s procurement process to satisfy the compliance requirements for the program. The City of Harrington, Delaware will also put procedures in place to check and review each bidder as part of the Federal suspension and debarment policies.
2023-001 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Child Nutrition Cluster – ALN 10.553, 10.555 & 10.559 Significant Deficiency in Internal Controls Over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.319, procurements must provide for full and open competition. Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: A competitive procurement process, which includes suspension and debarment certifications, was not properly performed by the Town for the purchase of school lunch food products. Cause: The Town utilized vendors that were previously contracted in prior years without performing a current procurement and suspension and debarment verification. Effect: The Town is not in compliance with Federal procurement or suspension and debarment requirements. Questioned Costs: $453,359 Repeat Finding from Prior Year: Yes; Finding 2022-001 Recommendation: The Town should implement procedures to perform competitive procurements, which include suspension and debarment certification, for all applicable purchases of goods and services. Views of Responsible Official: Management agrees with the finding.
2023-001 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Child Nutrition Cluster – ALN 10.553, 10.555 & 10.559 Significant Deficiency in Internal Controls Over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.319, procurements must provide for full and open competition. Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: A competitive procurement process, which includes suspension and debarment certifications, was not properly performed by the Town for the purchase of school lunch food products. Cause: The Town utilized vendors that were previously contracted in prior years without performing a current procurement and suspension and debarment verification. Effect: The Town is not in compliance with Federal procurement or suspension and debarment requirements. Questioned Costs: $453,359 Repeat Finding from Prior Year: Yes; Finding 2022-001 Recommendation: The Town should implement procedures to perform competitive procurements, which include suspension and debarment certification, for all applicable purchases of goods and services. Views of Responsible Official: Management agrees with the finding.
2023-001 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Child Nutrition Cluster – ALN 10.553, 10.555 & 10.559 Significant Deficiency in Internal Controls Over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.319, procurements must provide for full and open competition. Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: A competitive procurement process, which includes suspension and debarment certifications, was not properly performed by the Town for the purchase of school lunch food products. Cause: The Town utilized vendors that were previously contracted in prior years without performing a current procurement and suspension and debarment verification. Effect: The Town is not in compliance with Federal procurement or suspension and debarment requirements. Questioned Costs: $453,359 Repeat Finding from Prior Year: Yes; Finding 2022-001 Recommendation: The Town should implement procedures to perform competitive procurements, which include suspension and debarment certification, for all applicable purchases of goods and services. Views of Responsible Official: Management agrees with the finding.
2023-001 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Child Nutrition Cluster – ALN 10.553, 10.555 & 10.559 Significant Deficiency in Internal Controls Over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.319, procurements must provide for full and open competition. Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: A competitive procurement process, which includes suspension and debarment certifications, was not properly performed by the Town for the purchase of school lunch food products. Cause: The Town utilized vendors that were previously contracted in prior years without performing a current procurement and suspension and debarment verification. Effect: The Town is not in compliance with Federal procurement or suspension and debarment requirements. Questioned Costs: $453,359 Repeat Finding from Prior Year: Yes; Finding 2022-001 Recommendation: The Town should implement procedures to perform competitive procurements, which include suspension and debarment certification, for all applicable purchases of goods and services. Views of Responsible Official: Management agrees with the finding.
2023-007 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Child Nutrition Cluster – CFDA 10.553 & 10.555 Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Suspension and debarment compliance was not verified for five covered transactions. Cause: Lack of appropriate oversight resulted in required debarment checks not being performed or the appropriate certifications signed by the vendors. Effect: Grant transactions are not supported adequately, and the School is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. The five vendors were ultimately verified as not being suspended or debarred from participating in federal awards. Questioned Costs: None Repeat Finding from Prior Year: Yes; Finding 2022-007. Recommendation: The City should implement procedures to document that all contractors under covered transactions that are performing services for the grant are not suspended or debarred. Views of Responsible Official: Management agrees with the finding.
2023-007 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Child Nutrition Cluster – CFDA 10.553 & 10.555 Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Suspension and debarment compliance was not verified for five covered transactions. Cause: Lack of appropriate oversight resulted in required debarment checks not being performed or the appropriate certifications signed by the vendors. Effect: Grant transactions are not supported adequately, and the School is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. The five vendors were ultimately verified as not being suspended or debarred from participating in federal awards. Questioned Costs: None Repeat Finding from Prior Year: Yes; Finding 2022-007. Recommendation: The City should implement procedures to document that all contractors under covered transactions that are performing services for the grant are not suspended or debarred. Views of Responsible Official: Management agrees with the finding.
2023-007 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Child Nutrition Cluster – CFDA 10.553 & 10.555 Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Suspension and debarment compliance was not verified for five covered transactions. Cause: Lack of appropriate oversight resulted in required debarment checks not being performed or the appropriate certifications signed by the vendors. Effect: Grant transactions are not supported adequately, and the School is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. The five vendors were ultimately verified as not being suspended or debarred from participating in federal awards. Questioned Costs: None Repeat Finding from Prior Year: Yes; Finding 2022-007. Recommendation: The City should implement procedures to document that all contractors under covered transactions that are performing services for the grant are not suspended or debarred. Views of Responsible Official: Management agrees with the finding.
2023-009 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Suspension and debarment compliance was not verified for two covered transactions. Cause: Lack of appropriate oversight resulted in required debarment checks not being performed or the appropriate certifications signed by the vendors. Effect: Grant transactions are not supported adequately, and the School is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. The two vendors were ultimately verified as not being suspended or debarred from participating in federal awards. Questioned Costs: None Repeat Finding from Prior Year: No. Recommendation: The City should implement procedures to document that all contractors under covered transactions that are performing services for the grant are not suspended or debarred. Views of Responsible Official: Management agrees with the finding.
2023-009 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Suspension and debarment compliance was not verified for two covered transactions. Cause: Lack of appropriate oversight resulted in required debarment checks not being performed or the appropriate certifications signed by the vendors. Effect: Grant transactions are not supported adequately, and the School is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. The two vendors were ultimately verified as not being suspended or debarred from participating in federal awards. Questioned Costs: None Repeat Finding from Prior Year: No. Recommendation: The City should implement procedures to document that all contractors under covered transactions that are performing services for the grant are not suspended or debarred. Views of Responsible Official: Management agrees with the finding.
2023-009 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Suspension and debarment compliance was not verified for two covered transactions. Cause: Lack of appropriate oversight resulted in required debarment checks not being performed or the appropriate certifications signed by the vendors. Effect: Grant transactions are not supported adequately, and the School is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. The two vendors were ultimately verified as not being suspended or debarred from participating in federal awards. Questioned Costs: None Repeat Finding from Prior Year: No. Recommendation: The City should implement procedures to document that all contractors under covered transactions that are performing services for the grant are not suspended or debarred. Views of Responsible Official: Management agrees with the finding.
2023-009 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Suspension and debarment compliance was not verified for two covered transactions. Cause: Lack of appropriate oversight resulted in required debarment checks not being performed or the appropriate certifications signed by the vendors. Effect: Grant transactions are not supported adequately, and the School is at risk of awarding contracts to vendors not eligible to participate in federal awards programs. The two vendors were ultimately verified as not being suspended or debarred from participating in federal awards. Questioned Costs: None Repeat Finding from Prior Year: No. Recommendation: The City should implement procedures to document that all contractors under covered transactions that are performing services for the grant are not suspended or debarred. Views of Responsible Official: Management agrees with the finding.
FORMULA GRANTS FOR RURAL AREAS AND TRIBAL TRANSIT PROGRAM, ASSISTANCE LISTING No. 20.509, GRANT No’s. 112639 and 111709 Criteria: Per 2 CFR 200.214, 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. Condition: The county did not verify that program recipients/participants were not suspended, debarred, or otherwise excluded from participation in the program. Cause: The county does not have procurement policies and procedures in place that allow it to comply with procurement standards outlined in the Uniform Guidance. Effect: Non-compliance with program terms and conditions. Questioned Costs: None Recommendation: Management should develop procedures that will provide reasonable assurance that procurement of goods and services are made in compliance with applicable federal regulations and other procurement requirements specific to a federal award or subaward, and that no subaward, contract, or agreement for purchase of goods or services is made with any suspended or debarred party. Views of responsible officials and planned corrective action: The government agrees with this finding and will adhere to the attached corrective action plan.
FORMULA GRANTS FOR RURAL AREAS AND TRIBAL TRANSIT PROGRAM, ASSISTANCE LISTING No. 20.509, GRANT No’s. 112639 and 111709 Criteria: Per 2 CFR 200.214, 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. Condition: The county did not verify that program recipients/participants were not suspended, debarred, or otherwise excluded from participation in the program. Cause: The county does not have procurement policies and procedures in place that allow it to comply with procurement standards outlined in the Uniform Guidance. Effect: Non-compliance with program terms and conditions. Questioned Costs: None Recommendation: Management should develop procedures that will provide reasonable assurance that procurement of goods and services are made in compliance with applicable federal regulations and other procurement requirements specific to a federal award or subaward, and that no subaward, contract, or agreement for purchase of goods or services is made with any suspended or debarred party. Views of responsible officials and planned corrective action: The government agrees with this finding and will adhere to the attached corrective action plan.
NONCOMPLIANCE WITH PROCUREMENT, SUSPENSION & DEBARMENT REQUIREMENTS, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, AL No. 21.027 Criteria: Per section 13 of Treasury’s Final Rule FAQs and 2 CFR 200.214, counties must comply with the procurement standards set forth in 2 CFR 200.318, through 2 CFR 200.327, when using their SLFRF award funds to procure goods and services to carry out the objectives of their SLFRF award. In addition, 2 CFR 200.214, prohibits recipients from using SLFRF funds to enter into subawards and contracts with parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs. Condition: The county did not verify that program recipients/participants were not suspended, debarred, or otherwise excluded from participation in the program. Cause: The county does not have procurement policies and procedures in place that allow it to comply with procurement standards outlined in the Uniform Guidance. Effect: Non-compliance with program terms and conditions. Questioned Costs: None Recommendation: Management should develop procedures that will provide reasonable assurance that procurement of goods and services are made in compliance with applicable federal regulations and other procurement requirements specific to a federal award or subaward, and that no subaward, contract, or agreement for purchase of goods or services is made with any suspended or debarred party. Views of responsible officials and planned corrective action: The government agrees with this finding and will adhere to the attached corrective action plan.
2023-004 (2021-005) – FEDERAL AND FINANCIAL PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (B, F, G) – Significant Deficiency in Internal Control Over Financial Reporting, Significant Deficiency in Internal Control Over Compliance of Federal Awards and Instance of Non-Compliance Related to Federal Awards Funding Agency: U.S. Department of Housing and Urban Development (HUD) Title: Emergency Solution Grant (ESG) Program AL #: 14.231 Award #: 20-02-HDH-EHA-001, E-22-MC-35-0001 Award Period: July 1, 2022 – June 30, 2023 Questioned Costs: None Statement of Condition Heading Home did not follow federal procurement, suspension and debarment regulations or its federal procurement policy. Context During our testing of procurement, suspension, and debarment we noted the following: • We sampled two (out of a population of two) vendors who received more than $10,000 in fiscal year 2023 and noted no evidence of obtaining bids or quotes. Additionally, adequate sole source documentation was absent to support the procurement. • We sampled two (out of a population of two) vendors for tests of internal control over compliance and noted that Heading Home did not provide evidence of internal controls regarding suspension and debarment requirements. Criteria • Heading Home’s procurement policy states that for purchases exceeding $10,000, three (3) written competitive bids must be obtained before selecting a vendor. • Per 2 CFR 200.320(a)(2)(i) Small purchases - o (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold ($10,000 in fiscal year 2023) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2023). 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. • Additionally, 2 CFR 200.214 requires vendors awarded contracts expected to equal or exceed $25,000 to be checked for suspension and debarment via the System for Award Management Exclusions (SAM.gov). Heading Home is required to verify that entities it plans to do business with are not excluded or disqualified under the federal procurement regulations and the non-procurement common rule, or otherwise declared ineligible under statutory or regulatory authority. According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal entity (Heading Home) must establish and maintain effective internal control over the Federal award that provide reasonable assurance that Heading Home 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). According to §180.300 of Subpart C–Responsibilities of Participants Regarding Transactions Doing Business with Other Persons of 2 CFR Part 180, when you entering into a covered transaction with another person at the next lower tier, you must verify that the person you intend to conduct business with is not excluded or disqualified. This can be done 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. Cause Heading Home has not followed its policies and procedures related to procurement. Additionally, the procurement policy does not include the requirement for checking suspension and debarment via SAM.gov. Effect Heading Home is not in compliance with its policies and the federal procurement, suspension, and debarment requirements. Heading Home may have entered into contracts with ineligible contractors, exposing itself to potential liability and the risk of losing federal funds. Recommendation We recommend Heading Home follow its internal control policies and procedures related to procurement, as well as the following: • Document controls such as including the procurement files include proof of SAM.gov verification to ensure compliance with federal procurement regulations and internal procurement policy. • Implement policies and procedures to verify contractor suspension or debarment status before awarding contracts using federal funds. • Include the required suspension and debarment clause in contracts with federally funded contractors. View of Responsible Official and Corrective Action Plan Heading Home management agrees with this finding. Management has reviewed existing procurement policies and procedures found in Section III Policy #301 of Heading Home’s fiscal policies and procedures with appropriate staff and will enforce policies and procedures to ensure competitive bids are obtained where required. Management has also reviewed the existing suspension and debarment policies and procedures found in Section III Policy #302 with appropriate staff, and which require vendors to be reviewed on the SAM website, to ensure they have not been suspended or debarred. Although this review was conducted after the fact, each of the five vendors noted in this finding has since been reviewed on the SAM website, and none of them returned a notice of suspension or debarment. Management is in the process of reviewing all vendors paid $10,000 or more against the SAM website and will ensure all vendors are checked against the website who currently meet this requirement, as well as for those anticipated to meet this threshold. Proof of the SAM website review and approval will be maintained in each vendor file. Management reviewed the above mentioned vendors and noted none of them were suspended or debarred. Circumstantial evidence consisting of emails leads the organization to believe bids/quotes were in fact solicited but the actual procurement packets could not be located due to the extensive turnover in management during 2023. Management anticipates the above corrective action plan will be fully implemented by September 30, 2025. The personnel responsible for overseeing implementation include Connie Chavez, Chief Executive Officer; Debbie Brickman, Chief Financial Officer; and Armando Sanchez, contract accountant team lead.
2023-004 (2021-005) – FEDERAL AND FINANCIAL PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (B, F, G) – Significant Deficiency in Internal Control Over Financial Reporting, Significant Deficiency in Internal Control Over Compliance of Federal Awards and Instance of Non-Compliance Related to Federal Awards Funding Agency: U.S. Department of Housing and Urban Development (HUD) Title: Emergency Solution Grant (ESG) Program AL #: 14.231 Award #: 20-02-HDH-EHA-001, E-22-MC-35-0001 Award Period: July 1, 2022 – June 30, 2023 Questioned Costs: None Statement of Condition Heading Home did not follow federal procurement, suspension and debarment regulations or its federal procurement policy. Context During our testing of procurement, suspension, and debarment we noted the following: • We sampled two (out of a population of two) vendors who received more than $10,000 in fiscal year 2023 and noted no evidence of obtaining bids or quotes. Additionally, adequate sole source documentation was absent to support the procurement. • We sampled two (out of a population of two) vendors for tests of internal control over compliance and noted that Heading Home did not provide evidence of internal controls regarding suspension and debarment requirements. Criteria • Heading Home’s procurement policy states that for purchases exceeding $10,000, three (3) written competitive bids must be obtained before selecting a vendor. • Per 2 CFR 200.320(a)(2)(i) Small purchases - o (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold ($10,000 in fiscal year 2023) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2023). 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. • Additionally, 2 CFR 200.214 requires vendors awarded contracts expected to equal or exceed $25,000 to be checked for suspension and debarment via the System for Award Management Exclusions (SAM.gov). Heading Home is required to verify that entities it plans to do business with are not excluded or disqualified under the federal procurement regulations and the non-procurement common rule, or otherwise declared ineligible under statutory or regulatory authority. According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal entity (Heading Home) must establish and maintain effective internal control over the Federal award that provide reasonable assurance that Heading Home 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). According to §180.300 of Subpart C–Responsibilities of Participants Regarding Transactions Doing Business with Other Persons of 2 CFR Part 180, when you entering into a covered transaction with another person at the next lower tier, you must verify that the person you intend to conduct business with is not excluded or disqualified. This can be done 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. Cause Heading Home has not followed its policies and procedures related to procurement. Additionally, the procurement policy does not include the requirement for checking suspension and debarment via SAM.gov. Effect Heading Home is not in compliance with its policies and the federal procurement, suspension, and debarment requirements. Heading Home may have entered into contracts with ineligible contractors, exposing itself to potential liability and the risk of losing federal funds. Recommendation We recommend Heading Home follow its internal control policies and procedures related to procurement, as well as the following: • Document controls such as including the procurement files include proof of SAM.gov verification to ensure compliance with federal procurement regulations and internal procurement policy. • Implement policies and procedures to verify contractor suspension or debarment status before awarding contracts using federal funds. • Include the required suspension and debarment clause in contracts with federally funded contractors. View of Responsible Official and Corrective Action Plan Heading Home management agrees with this finding. Management has reviewed existing procurement policies and procedures found in Section III Policy #301 of Heading Home’s fiscal policies and procedures with appropriate staff and will enforce policies and procedures to ensure competitive bids are obtained where required. Management has also reviewed the existing suspension and debarment policies and procedures found in Section III Policy #302 with appropriate staff, and which require vendors to be reviewed on the SAM website, to ensure they have not been suspended or debarred. Although this review was conducted after the fact, each of the five vendors noted in this finding has since been reviewed on the SAM website, and none of them returned a notice of suspension or debarment. Management is in the process of reviewing all vendors paid $10,000 or more against the SAM website and will ensure all vendors are checked against the website who currently meet this requirement, as well as for those anticipated to meet this threshold. Proof of the SAM website review and approval will be maintained in each vendor file. Management reviewed the above mentioned vendors and noted none of them were suspended or debarred. Circumstantial evidence consisting of emails leads the organization to believe bids/quotes were in fact solicited but the actual procurement packets could not be located due to the extensive turnover in management during 2023. Management anticipates the above corrective action plan will be fully implemented by September 30, 2025. The personnel responsible for overseeing implementation include Connie Chavez, Chief Executive Officer; Debbie Brickman, Chief Financial Officer; and Armando Sanchez, contract accountant team lead.
2023-004 (2021-005) – FEDERAL AND FINANCIAL PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (B, F, G) – Significant Deficiency in Internal Control Over Financial Reporting, Significant Deficiency in Internal Control Over Compliance of Federal Awards and Instance of Non-Compliance Related to Federal Awards Funding Agency: U.S. Department of Housing and Urban Development (HUD) Title: Emergency Solution Grant (ESG) Program AL #: 14.231 Award #: 20-02-HDH-EHA-001, E-22-MC-35-0001 Award Period: July 1, 2022 – June 30, 2023 Questioned Costs: None Statement of Condition Heading Home did not follow federal procurement, suspension and debarment regulations or its federal procurement policy. Context During our testing of procurement, suspension, and debarment we noted the following: • We sampled two (out of a population of two) vendors who received more than $10,000 in fiscal year 2023 and noted no evidence of obtaining bids or quotes. Additionally, adequate sole source documentation was absent to support the procurement. • We sampled two (out of a population of two) vendors for tests of internal control over compliance and noted that Heading Home did not provide evidence of internal controls regarding suspension and debarment requirements. Criteria • Heading Home’s procurement policy states that for purchases exceeding $10,000, three (3) written competitive bids must be obtained before selecting a vendor. • Per 2 CFR 200.320(a)(2)(i) Small purchases - o (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold ($10,000 in fiscal year 2023) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2023). 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. • Additionally, 2 CFR 200.214 requires vendors awarded contracts expected to equal or exceed $25,000 to be checked for suspension and debarment via the System for Award Management Exclusions (SAM.gov). Heading Home is required to verify that entities it plans to do business with are not excluded or disqualified under the federal procurement regulations and the non-procurement common rule, or otherwise declared ineligible under statutory or regulatory authority. According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal entity (Heading Home) must establish and maintain effective internal control over the Federal award that provide reasonable assurance that Heading Home 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). According to §180.300 of Subpart C–Responsibilities of Participants Regarding Transactions Doing Business with Other Persons of 2 CFR Part 180, when you entering into a covered transaction with another person at the next lower tier, you must verify that the person you intend to conduct business with is not excluded or disqualified. This can be done 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. Cause Heading Home has not followed its policies and procedures related to procurement. Additionally, the procurement policy does not include the requirement for checking suspension and debarment via SAM.gov. Effect Heading Home is not in compliance with its policies and the federal procurement, suspension, and debarment requirements. Heading Home may have entered into contracts with ineligible contractors, exposing itself to potential liability and the risk of losing federal funds. Recommendation We recommend Heading Home follow its internal control policies and procedures related to procurement, as well as the following: • Document controls such as including the procurement files include proof of SAM.gov verification to ensure compliance with federal procurement regulations and internal procurement policy. • Implement policies and procedures to verify contractor suspension or debarment status before awarding contracts using federal funds. • Include the required suspension and debarment clause in contracts with federally funded contractors. View of Responsible Official and Corrective Action Plan Heading Home management agrees with this finding. Management has reviewed existing procurement policies and procedures found in Section III Policy #301 of Heading Home’s fiscal policies and procedures with appropriate staff and will enforce policies and procedures to ensure competitive bids are obtained where required. Management has also reviewed the existing suspension and debarment policies and procedures found in Section III Policy #302 with appropriate staff, and which require vendors to be reviewed on the SAM website, to ensure they have not been suspended or debarred. Although this review was conducted after the fact, each of the five vendors noted in this finding has since been reviewed on the SAM website, and none of them returned a notice of suspension or debarment. Management is in the process of reviewing all vendors paid $10,000 or more against the SAM website and will ensure all vendors are checked against the website who currently meet this requirement, as well as for those anticipated to meet this threshold. Proof of the SAM website review and approval will be maintained in each vendor file. Management reviewed the above mentioned vendors and noted none of them were suspended or debarred. Circumstantial evidence consisting of emails leads the organization to believe bids/quotes were in fact solicited but the actual procurement packets could not be located due to the extensive turnover in management during 2023. Management anticipates the above corrective action plan will be fully implemented by September 30, 2025. The personnel responsible for overseeing implementation include Connie Chavez, Chief Executive Officer; Debbie Brickman, Chief Financial Officer; and Armando Sanchez, contract accountant team lead.
2023-004 (2021-005) – FEDERAL AND FINANCIAL PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (B, F, G) – Significant Deficiency in Internal Control Over Financial Reporting, Significant Deficiency in Internal Control Over Compliance of Federal Awards and Instance of Non-Compliance Related to Federal Awards Funding Agency: U.S. Department of Housing and Urban Development (HUD) Title: Emergency Solution Grant (ESG) Program AL #: 14.231 Award #: 20-02-HDH-EHA-001, E-22-MC-35-0001 Award Period: July 1, 2022 – June 30, 2023 Questioned Costs: None Statement of Condition Heading Home did not follow federal procurement, suspension and debarment regulations or its federal procurement policy. Context During our testing of procurement, suspension, and debarment we noted the following: • We sampled two (out of a population of two) vendors who received more than $10,000 in fiscal year 2023 and noted no evidence of obtaining bids or quotes. Additionally, adequate sole source documentation was absent to support the procurement. • We sampled two (out of a population of two) vendors for tests of internal control over compliance and noted that Heading Home did not provide evidence of internal controls regarding suspension and debarment requirements. Criteria • Heading Home’s procurement policy states that for purchases exceeding $10,000, three (3) written competitive bids must be obtained before selecting a vendor. • Per 2 CFR 200.320(a)(2)(i) Small purchases - o (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold ($10,000 in fiscal year 2023) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2023). 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. • Additionally, 2 CFR 200.214 requires vendors awarded contracts expected to equal or exceed $25,000 to be checked for suspension and debarment via the System for Award Management Exclusions (SAM.gov). Heading Home is required to verify that entities it plans to do business with are not excluded or disqualified under the federal procurement regulations and the non-procurement common rule, or otherwise declared ineligible under statutory or regulatory authority. According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal entity (Heading Home) must establish and maintain effective internal control over the Federal award that provide reasonable assurance that Heading Home 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). According to §180.300 of Subpart C–Responsibilities of Participants Regarding Transactions Doing Business with Other Persons of 2 CFR Part 180, when you entering into a covered transaction with another person at the next lower tier, you must verify that the person you intend to conduct business with is not excluded or disqualified. This can be done 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. Cause Heading Home has not followed its policies and procedures related to procurement. Additionally, the procurement policy does not include the requirement for checking suspension and debarment via SAM.gov. Effect Heading Home is not in compliance with its policies and the federal procurement, suspension, and debarment requirements. Heading Home may have entered into contracts with ineligible contractors, exposing itself to potential liability and the risk of losing federal funds. Recommendation We recommend Heading Home follow its internal control policies and procedures related to procurement, as well as the following: • Document controls such as including the procurement files include proof of SAM.gov verification to ensure compliance with federal procurement regulations and internal procurement policy. • Implement policies and procedures to verify contractor suspension or debarment status before awarding contracts using federal funds. • Include the required suspension and debarment clause in contracts with federally funded contractors. View of Responsible Official and Corrective Action Plan Heading Home management agrees with this finding. Management has reviewed existing procurement policies and procedures found in Section III Policy #301 of Heading Home’s fiscal policies and procedures with appropriate staff and will enforce policies and procedures to ensure competitive bids are obtained where required. Management has also reviewed the existing suspension and debarment policies and procedures found in Section III Policy #302 with appropriate staff, and which require vendors to be reviewed on the SAM website, to ensure they have not been suspended or debarred. Although this review was conducted after the fact, each of the five vendors noted in this finding has since been reviewed on the SAM website, and none of them returned a notice of suspension or debarment. Management is in the process of reviewing all vendors paid $10,000 or more against the SAM website and will ensure all vendors are checked against the website who currently meet this requirement, as well as for those anticipated to meet this threshold. Proof of the SAM website review and approval will be maintained in each vendor file. Management reviewed the above mentioned vendors and noted none of them were suspended or debarred. Circumstantial evidence consisting of emails leads the organization to believe bids/quotes were in fact solicited but the actual procurement packets could not be located due to the extensive turnover in management during 2023. Management anticipates the above corrective action plan will be fully implemented by September 30, 2025. The personnel responsible for overseeing implementation include Connie Chavez, Chief Executive Officer; Debbie Brickman, Chief Financial Officer; and Armando Sanchez, contract accountant team lead.
2023-004 (2021-005) – FEDERAL AND FINANCIAL PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (B, F, G) – Significant Deficiency in Internal Control Over Financial Reporting, Significant Deficiency in Internal Control Over Compliance of Federal Awards and Instance of Non-Compliance Related to Federal Awards Funding Agency: U.S. Department of Housing and Urban Development (HUD) Title: Emergency Solution Grant (ESG) Program AL #: 14.231 Award #: 20-02-HDH-EHA-001, E-22-MC-35-0001 Award Period: July 1, 2022 – June 30, 2023 Questioned Costs: None Statement of Condition Heading Home did not follow federal procurement, suspension and debarment regulations or its federal procurement policy. Context During our testing of procurement, suspension, and debarment we noted the following: • We sampled two (out of a population of two) vendors who received more than $10,000 in fiscal year 2023 and noted no evidence of obtaining bids or quotes. Additionally, adequate sole source documentation was absent to support the procurement. • We sampled two (out of a population of two) vendors for tests of internal control over compliance and noted that Heading Home did not provide evidence of internal controls regarding suspension and debarment requirements. Criteria • Heading Home’s procurement policy states that for purchases exceeding $10,000, three (3) written competitive bids must be obtained before selecting a vendor. • Per 2 CFR 200.320(a)(2)(i) Small purchases - o (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold ($10,000 in fiscal year 2023) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2023). 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. • Additionally, 2 CFR 200.214 requires vendors awarded contracts expected to equal or exceed $25,000 to be checked for suspension and debarment via the System for Award Management Exclusions (SAM.gov). Heading Home is required to verify that entities it plans to do business with are not excluded or disqualified under the federal procurement regulations and the non-procurement common rule, or otherwise declared ineligible under statutory or regulatory authority. According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal entity (Heading Home) must establish and maintain effective internal control over the Federal award that provide reasonable assurance that Heading Home 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). According to §180.300 of Subpart C–Responsibilities of Participants Regarding Transactions Doing Business with Other Persons of 2 CFR Part 180, when you entering into a covered transaction with another person at the next lower tier, you must verify that the person you intend to conduct business with is not excluded or disqualified. This can be done 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. Cause Heading Home has not followed its policies and procedures related to procurement. Additionally, the procurement policy does not include the requirement for checking suspension and debarment via SAM.gov. Effect Heading Home is not in compliance with its policies and the federal procurement, suspension, and debarment requirements. Heading Home may have entered into contracts with ineligible contractors, exposing itself to potential liability and the risk of losing federal funds. Recommendation We recommend Heading Home follow its internal control policies and procedures related to procurement, as well as the following: • Document controls such as including the procurement files include proof of SAM.gov verification to ensure compliance with federal procurement regulations and internal procurement policy. • Implement policies and procedures to verify contractor suspension or debarment status before awarding contracts using federal funds. • Include the required suspension and debarment clause in contracts with federally funded contractors. View of Responsible Official and Corrective Action Plan Heading Home management agrees with this finding. Management has reviewed existing procurement policies and procedures found in Section III Policy #301 of Heading Home’s fiscal policies and procedures with appropriate staff and will enforce policies and procedures to ensure competitive bids are obtained where required. Management has also reviewed the existing suspension and debarment policies and procedures found in Section III Policy #302 with appropriate staff, and which require vendors to be reviewed on the SAM website, to ensure they have not been suspended or debarred. Although this review was conducted after the fact, each of the five vendors noted in this finding has since been reviewed on the SAM website, and none of them returned a notice of suspension or debarment. Management is in the process of reviewing all vendors paid $10,000 or more against the SAM website and will ensure all vendors are checked against the website who currently meet this requirement, as well as for those anticipated to meet this threshold. Proof of the SAM website review and approval will be maintained in each vendor file. Management reviewed the above mentioned vendors and noted none of them were suspended or debarred. Circumstantial evidence consisting of emails leads the organization to believe bids/quotes were in fact solicited but the actual procurement packets could not be located due to the extensive turnover in management during 2023. Management anticipates the above corrective action plan will be fully implemented by September 30, 2025. The personnel responsible for overseeing implementation include Connie Chavez, Chief Executive Officer; Debbie Brickman, Chief Financial Officer; and Armando Sanchez, contract accountant team lead.
(2023-004) Documentation of Purchasing Compliance - Significant deficiency Criteria Per CFR §180.300 and 2 CFR §200.214, the District must verify vendors are not suspended or debarred or otherwise excluded from participating in a covered transaction. This verification may be accomplished by checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA); collecting a certification from the entity, or adding a clause or condition to the covered transaction with that entity. Condition During our testing of suspension and debarment compliance, we noted that the District did not retain documentation demonstrating that vendors were verified as not suspended, debarred, or otherwise excluded from participation in federal programs prior to execution of two contracts, each with expenditures exceeding $25,000. Cause The District did not have formalized procedures to ensure suspension and debarment verifications were performed and documented prior to executing covered contracts. Effect Without adequate verification and documentation, there is a risk that the District could contract with vendors who are ineligible to receive federal funds, resulting in noncompliance with federal regulations. Questioned Costs No questioned costs were identified as a result of our procedures. Context/Sampling Two vendor contracts with expenditures greater than $25,000 were selected for testing. In both cases, the District did not provide documentation of suspension and debarment verification at the time of contract execution. Recommendation We recommend that the District implement procedures to verify vendor eligibility prior to entering into federally funded contracts. Acceptable methods include retaining a SAM.gov screenshot, obtaining vendor certification, or including a suspension and debarment clause in the contract. The District should also ensure documentation is retained in the procurement file and assign responsibility for this task to appropriate staff. Training and periodic reviews should be conducted to reinforce compliance and reduce the risk of using ineligible vendors. Management’s Corrective Action Planned Management concurs with the recommendation. IVGID will implement a procedure to document the procurement process and review of suspension and debarment for all vendors that undergo the bidding process.
Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must 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 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: During our audit, we noted several cases in which the Center 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. Cause: Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/ consultants. Effect or Potential Effect: The Center 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. Effect or Potential Effect (continued): 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. Context: The Center failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center 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.
Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must 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 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: During our audit, we noted several cases in which the Center 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. Cause: Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/ consultants. Effect or Potential Effect: The Center 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. Effect or Potential Effect (continued): 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. Context: The Center failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center 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.
Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must 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 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: During our audit, we noted several cases in which the Center 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. Cause: Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/ consultants. Effect or Potential Effect: The Center 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. Effect or Potential Effect (continued): 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. Context: The Center failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center 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.
Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must 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 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: During our audit, we noted several cases in which the Center 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. Cause: Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/ consultants. Effect or Potential Effect: The Center 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. Effect or Potential Effect (continued): 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. Context: The Center failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center 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.
Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must 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 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: During our audit, we noted several cases in which the Center 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. Cause: Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/ consultants. Effect or Potential Effect: The Center 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. Effect or Potential Effect (continued): 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. Context: The Center failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center 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.