2022-004 (2021-005) – FEDERAL AND FINANCIAL PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (B, E, F) – 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 #: All (see Schedule of Expenditures of Federal Awards) Award Period: July 1, 2021 – June 30, 2022 Questioned Costs: None Statement of Condition Heading Home did not follow federal procurement and suspension and debarment regulation nor its federal procurement policy. Context During our testing of procurement, suspension, and debarment we noted the following: • We sampled five out of five vendors which were paid more than $10,000 in fiscal year 2022, and noted there was no evidence of bids or quotes obtained. Additionally, adequate sole source documentation was not maintained to support the procurement. • We sampled three out of three vendors for tests of internal control over compliance and compliance and we noted Heading Home did not show evidence of internal controls over compliance with suspension and debarment requirements. Criteria • Heading Home’s procurement policy states that for the purchase of goods or services in excess of $10,000 three (3) competitive bids must be obtained in writing prior to 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 2022) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2022). 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 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 provides reasonable assurance 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 enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. 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 is not following their own policies and procedures related to procurement. Additionally, Heading Home’s procurement policy does not note the requirement for checking suspension and debarment via SAM.gov. Effect Heading Home is not in compliance with their own policies and the federal procurement, suspension, and debarment requirements. Heading Home may have entered into contracts with ineligible contractors and exposed itself to potential liability and loss of federal funds. Recommendation We recommend Heading Home follow their internal control policies and procedures related to procurement, as well as the following: • Document controls to ensure compliance with federal procurement regulation and its federal procurement policy. • Implement policies and procedures to verify the suspension and debarment status of contractors before awarding contracts using federal funds. • Include the required suspension and debarment clause in its contracts with contractors using federal funds. View of Responsible Official and Corrective Action Plan Heading Home management is in agreement with this finding. Management has reviewed the existing procurement policies and procedures found in Section III Policy #301 of Heading Homes fiscal policies and procedures with appropriate staff and will enforce the 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 requires these vendors to be reviewed on the SAM website to ensure they have not been suspended or debarred. While after the fact, each of the five vendors noted in this finding have since been reviewed on the SAM website and none of them returned any notices of having been suspended or debarred. Management is in the process of going back and 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 it is anticipated will meet this threshold. Proof of the SAM website review and approval will be maintained in each vendor file. Management anticipates the above corrective action plan to be fully implemented by June 30, 2024. Personnel responsible for ensuring implementation include Connie Chavez, Chief Executive Officer, Debbie Brickman, Chief Financial Officer, and Armando Sanchez, contract accountants team lead.
2022-004 (2021-005) – FEDERAL AND FINANCIAL PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (B, E, F) – 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 #: All (see Schedule of Expenditures of Federal Awards) Award Period: July 1, 2021 – June 30, 2022 Questioned Costs: None Statement of Condition Heading Home did not follow federal procurement and suspension and debarment regulation nor its federal procurement policy. Context During our testing of procurement, suspension, and debarment we noted the following: • We sampled five out of five vendors which were paid more than $10,000 in fiscal year 2022, and noted there was no evidence of bids or quotes obtained. Additionally, adequate sole source documentation was not maintained to support the procurement. • We sampled three out of three vendors for tests of internal control over compliance and compliance and we noted Heading Home did not show evidence of internal controls over compliance with suspension and debarment requirements. Criteria • Heading Home’s procurement policy states that for the purchase of goods or services in excess of $10,000 three (3) competitive bids must be obtained in writing prior to 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 2022) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2022). 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 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 provides reasonable assurance 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 enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. 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 is not following their own policies and procedures related to procurement. Additionally, Heading Home’s procurement policy does not note the requirement for checking suspension and debarment via SAM.gov. Effect Heading Home is not in compliance with their own policies and the federal procurement, suspension, and debarment requirements. Heading Home may have entered into contracts with ineligible contractors and exposed itself to potential liability and loss of federal funds. Recommendation We recommend Heading Home follow their internal control policies and procedures related to procurement, as well as the following: • Document controls to ensure compliance with federal procurement regulation and its federal procurement policy. • Implement policies and procedures to verify the suspension and debarment status of contractors before awarding contracts using federal funds. • Include the required suspension and debarment clause in its contracts with contractors using federal funds. View of Responsible Official and Corrective Action Plan Heading Home management is in agreement with this finding. Management has reviewed the existing procurement policies and procedures found in Section III Policy #301 of Heading Homes fiscal policies and procedures with appropriate staff and will enforce the 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 requires these vendors to be reviewed on the SAM website to ensure they have not been suspended or debarred. While after the fact, each of the five vendors noted in this finding have since been reviewed on the SAM website and none of them returned any notices of having been suspended or debarred. Management is in the process of going back and 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 it is anticipated will meet this threshold. Proof of the SAM website review and approval will be maintained in each vendor file. Management anticipates the above corrective action plan to be fully implemented by June 30, 2024. Personnel responsible for ensuring implementation include Connie Chavez, Chief Executive Officer, Debbie Brickman, Chief Financial Officer, and Armando Sanchez, contract accountants team lead.
2022-004 (2021-005) – FEDERAL AND FINANCIAL PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (B, E, F) – 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 #: All (see Schedule of Expenditures of Federal Awards) Award Period: July 1, 2021 – June 30, 2022 Questioned Costs: None Statement of Condition Heading Home did not follow federal procurement and suspension and debarment regulation nor its federal procurement policy. Context During our testing of procurement, suspension, and debarment we noted the following: • We sampled five out of five vendors which were paid more than $10,000 in fiscal year 2022, and noted there was no evidence of bids or quotes obtained. Additionally, adequate sole source documentation was not maintained to support the procurement. • We sampled three out of three vendors for tests of internal control over compliance and compliance and we noted Heading Home did not show evidence of internal controls over compliance with suspension and debarment requirements. Criteria • Heading Home’s procurement policy states that for the purchase of goods or services in excess of $10,000 three (3) competitive bids must be obtained in writing prior to 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 2022) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2022). 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 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 provides reasonable assurance 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 enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. 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 is not following their own policies and procedures related to procurement. Additionally, Heading Home’s procurement policy does not note the requirement for checking suspension and debarment via SAM.gov. Effect Heading Home is not in compliance with their own policies and the federal procurement, suspension, and debarment requirements. Heading Home may have entered into contracts with ineligible contractors and exposed itself to potential liability and loss of federal funds. Recommendation We recommend Heading Home follow their internal control policies and procedures related to procurement, as well as the following: • Document controls to ensure compliance with federal procurement regulation and its federal procurement policy. • Implement policies and procedures to verify the suspension and debarment status of contractors before awarding contracts using federal funds. • Include the required suspension and debarment clause in its contracts with contractors using federal funds. View of Responsible Official and Corrective Action Plan Heading Home management is in agreement with this finding. Management has reviewed the existing procurement policies and procedures found in Section III Policy #301 of Heading Homes fiscal policies and procedures with appropriate staff and will enforce the 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 requires these vendors to be reviewed on the SAM website to ensure they have not been suspended or debarred. While after the fact, each of the five vendors noted in this finding have since been reviewed on the SAM website and none of them returned any notices of having been suspended or debarred. Management is in the process of going back and 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 it is anticipated will meet this threshold. Proof of the SAM website review and approval will be maintained in each vendor file. Management anticipates the above corrective action plan to be fully implemented by June 30, 2024. Personnel responsible for ensuring implementation include Connie Chavez, Chief Executive Officer, Debbie Brickman, Chief Financial Officer, and Armando Sanchez, contract accountants team lead.
2022-004 (2021-005) – FEDERAL AND FINANCIAL PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (B, E, F) – 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 #: All (see Schedule of Expenditures of Federal Awards) Award Period: July 1, 2021 – June 30, 2022 Questioned Costs: None Statement of Condition Heading Home did not follow federal procurement and suspension and debarment regulation nor its federal procurement policy. Context During our testing of procurement, suspension, and debarment we noted the following: • We sampled five out of five vendors which were paid more than $10,000 in fiscal year 2022, and noted there was no evidence of bids or quotes obtained. Additionally, adequate sole source documentation was not maintained to support the procurement. • We sampled three out of three vendors for tests of internal control over compliance and compliance and we noted Heading Home did not show evidence of internal controls over compliance with suspension and debarment requirements. Criteria • Heading Home’s procurement policy states that for the purchase of goods or services in excess of $10,000 three (3) competitive bids must be obtained in writing prior to 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 2022) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2022). 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 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 provides reasonable assurance 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 enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. 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 is not following their own policies and procedures related to procurement. Additionally, Heading Home’s procurement policy does not note the requirement for checking suspension and debarment via SAM.gov. Effect Heading Home is not in compliance with their own policies and the federal procurement, suspension, and debarment requirements. Heading Home may have entered into contracts with ineligible contractors and exposed itself to potential liability and loss of federal funds. Recommendation We recommend Heading Home follow their internal control policies and procedures related to procurement, as well as the following: • Document controls to ensure compliance with federal procurement regulation and its federal procurement policy. • Implement policies and procedures to verify the suspension and debarment status of contractors before awarding contracts using federal funds. • Include the required suspension and debarment clause in its contracts with contractors using federal funds. View of Responsible Official and Corrective Action Plan Heading Home management is in agreement with this finding. Management has reviewed the existing procurement policies and procedures found in Section III Policy #301 of Heading Homes fiscal policies and procedures with appropriate staff and will enforce the 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 requires these vendors to be reviewed on the SAM website to ensure they have not been suspended or debarred. While after the fact, each of the five vendors noted in this finding have since been reviewed on the SAM website and none of them returned any notices of having been suspended or debarred. Management is in the process of going back and 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 it is anticipated will meet this threshold. Proof of the SAM website review and approval will be maintained in each vendor file. Management anticipates the above corrective action plan to be fully implemented by June 30, 2024. Personnel responsible for ensuring implementation include Connie Chavez, Chief Executive Officer, Debbie Brickman, Chief Financial Officer, and Armando Sanchez, contract accountants team lead.
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. 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. - $157,725, Westmoreland Electric Services – $20,837. 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: Upon inquiry of county personnel and a test of twenty (20) disbursement totaling $303,873, the following instances of noncompliance were noted: • The County failed to document suspension and debarment of vendors for purchases over $25,000. • The County failed to have written standards of conduct that cover conflicts of interest and that govern the performance of its employees engaged in the selection, award, and administration of contract. Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal disbursements are made in accordance with federal compliance requirements. Effect of Condition: This condition resulted in noncompliance with grant requirements and could result in a loss of federal funds. Recommendation: OSAI recommends the County gain an understanding of the grant requirements for this program and implement internal controls to ensure compliance with these grant requirements. Management Response: Chairman of the Board of County Commissioners: These procurement issues originated during the prior County Clerk’s administration, but the current leadership is focused on corrective measures. Together, we are: • developing a SOP to ensure vendor checks for suspension and debarment are conducted on all purchases over $25,000, • establishing written standards of conduct to address conflicts of interest and set clear procurement guidelines, • and enhancing oversight and review to ensure all procurement processes are fully compliant with federal regulations. Our goal is to build a consistent, transparent procurement framework that safeguards both compliance and public trust. County Clerk: I was not the County Clerk in office at this time. To correct this issue, the County plans to develop a SOP to timely and accurately track and report on the SEFA. The SOP will be reviewed, adopted, and monitored by the Board of County Commissioners. Criteria: Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds (8. Procurement, Suspension & Debarment.) reads as follows: Recipients are responsible for ensuring that any procurement using SLFRF funds, or payments under procurement contracts using such funds, are consistent with the procurement standards set forth in the Uniform Guidance at 2 CFR 200.317 through 2 CFR 200.327, unless stated otherwise by Treasury. As outlined in FAQ 13.15, only a subset of the Uniform Guidance requirements at 2 CFR Part 200 Subpart D (Post Federal Award Requirements) applies to recipients’ use of funds in the revenue loss eligible use category. The procurement standards set forth in the Uniform Guidance at 2 CRF 200.317 through 2 CRF 200.327 are not included in FAQ 13.15’s list of applicable Subpart D requirements that apply to recipients’ use of funds in the revenue loss eligible use category. The Uniform Guidance establishes in 2 CFR 200.319 that all procurement transactions for property or services must be conducted in a manner providing full and open competition, consistent with standards outlined in 2 CFR 200.320, which allows for non-competitive procurements only in certain circumstances. Recipients must have and use documented procurement procedures that are consistent with the standards outlined in 2 CFR 200.317 through 2 CFR 200.320. In addition, the Uniform Guidance at 2 CFR 200.214, 2 CFR Part 180, and Treasury’s implementing regulations at 31 CFR Part 19, prohibit recipients from entering into contracts with suspended or debarred parties. The procurement standards outlined in the Uniform Guidance require an infrastructure for competitive bidding and contractor oversight, including maintaining written standards of conduct. Your organization must ensure adherence to all applicable local, State, and federal procurement laws and regulations. Further, 2 CFR § 200.319 Competition (d) reads as follows: The non-Federal entity must have written procedures for procurement transactions.
CONDITION: Per the on-site monitoring report of the City’s Community Development Block Grant (CDBG) Program performed by the Department of Housing and Urban Development dated May 15, 2024, the City purchased a device called ShotSpotter with CDBG contract B-20-MC-42-0106 funding in the amount of $99,000. The City of McKeesport did not verify if the above vendor was on the excluded parties list in the System for Award Management through www.sam.gov. 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. In addition, the City’s Community Development Block Grant Policies & Procedures Manual in Section VIII for procurement requires this step to be performed. CAUSE: It was not readily determinable as to why this procedural step was overlooked by applicable City personnel during the procurement process. EFFECT: The City of McKeesport did not comply with the requirements of Section 2 CFR 200.214 of the Uniform Guidance, nor Section VIII of the City’s CDBG Policies & Procedures Manual for procurement, regarding the procedure required to determine whether a contractor/vendor was debarred or suspended from participating in federal assistance programs. QUESTIONED COST: $99,000 RECOMMENDATION: I am recommending that the management of the City utilize the www.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, and Section VIII of the City’s CDBG Policies & Procedures Manual for procurement. VIEWS OF RESPONSIBLE OFFICIALS: The City concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: Per the on-site monitoring report of the City’s Community Development Block Grant (CDBG) Program performed by the Department of Housing and Urban Development dated May 15, 2024, the City purchased a device called ShotSpotter with CDBG contract B-20-MC-42-0106 funding in the amount of $99,000. The City of McKeesport did not verify if the above vendor was on the excluded parties list in the System for Award Management through www.sam.gov. 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. In addition, the City’s Community Development Block Grant Policies & Procedures Manual in Section VIII for procurement requires this step to be performed. CAUSE: It was not readily determinable as to why this procedural step was overlooked by applicable City personnel during the procurement process. EFFECT: The City of McKeesport did not comply with the requirements of Section 2 CFR 200.214 of the Uniform Guidance, nor Section VIII of the City’s CDBG Policies & Procedures Manual for procurement, regarding the procedure required to determine whether a contractor/vendor was debarred or suspended from participating in federal assistance programs. QUESTIONED COST: $99,000 RECOMMENDATION: I am recommending that the management of the City utilize the www.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, and Section VIII of the City’s CDBG Policies & Procedures Manual for procurement. VIEWS OF RESPONSIBLE OFFICIALS: The City concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
2021-006 Suspension and DebarmentProgram Information Federal Agency U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers 21H8FCS41567C6, H8C35204, H8D36710, H7CHA37307 Criteria [ ] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.214 and Title 2 CFR 180.300 require that organizations “verify that the person with whom you intend to do business is not excluded or disqualified” before entering into covered transaction (procurement contracts, purchase orders, or agreements greater than or equal to $25,000) with persons or vendors. Condition The Organization did not retain appropriate evidence of verification that vendors and contractors were not excluded from doing business with the federal government. Context This finding appears to be a systemic problem. Out of four covered vendors selected, none had evidence that an exclusion check was performed prior to related expenditures. Cause The Organization did not retain for its records proof that the verification check of vendors and contractors was made, and did not have policies and procedures in place to ensure this was done. Effect The Organization may have entered into covered transactions with persons or vendors who have been suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Organization implement controls requiring that exclusion checks be performed prior to signing any contracts or purchase orders or agreements that are covered transactions. This exclusion checks should be maintained as part of the supporting documentation for the expenditure. View of responsible officials and planned corrective action The Organization acknowledges the material weakness related to the lack of documented verification of vendor suspension and debarment status. While the organization is confident vendors were appropriate screened through SAM.gov - we acknowledge proper supporting documentation was not maintained. Corrective Actions • Policy and Procedure Implementation: The Organization has implemented formal procurement procedures requiring suspension and debarment (SAM) checks prior to entering into any covered transactions exceeding $25,000. • Documentation Requirements: Evidence of exclusion checks is now required to be retained and maintained with the supporting procurement and expenditure documentation. • Process Integration and Oversight: Exclusion verification has been incorporated into the procurement and approval workflow to ensure compliance is performed consistently before contract execution or payment. In alignment with broader control enhancements noted previously, these actions establish a consistent and documented process to ensure compliance with federal requirements and prevent engagement with excluded or disqualified parties going forward.