Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
2024-002 Procurement and Suspension and Debarment Program: Coronavirus State and Local Fiscal Recovery Funds – Assistance Listing Number 21.027, U.S. Department of Treasury passed through the City of New Orleans, Louisiana Compliance Requirement: Procurement and Suspension and Debarment Criteria: Non-federal entities are prohibited from contracting with parties that are suspended or debarred. "Covered transactions" include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. When a non-federal entity enters into a covered transaction, 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 Services Administration (GSA) and available at SAM.gov, (2) receiving a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). In addition, under 2 CFR 200.326, Contract Provisions, a non-federal entity’s contracts, must contain the applicable provisions described in Appendix II to Part 200, Title 2 - Contract Provisions for non-Federal Entity Contracts under Federal Awards. Condition: During our testing of compliance with the suspension and debarment regulations, the Office was unable to provide documentation of its determination during the procurement process that the 2 of the 3 vendors selected for testing were not suspended or debarred. Based on our review of SAM.gov, these vendors were not suspended or debarred. In addition, for 2 of the 3 contracts selected for testing, the required provisions described in Appendix II to Part 200 - Contract Provisions for non-Federal Entity Contracts under Federal Awards were not included. The universe (population) from which the vendors and contracts were selected were all contracts over $25,000 with expenditures incurred during 2024 consisting of 4 contracts. Questioned Costs: None Cause: Management did not maintain documentation of the Office’s determination of whether vendors were suspended or debarred for all covered transactions. Effect: Without ensuring documentation is maintained over whether a vendor is suspended or debarred, the Office may enter into contracts with suspended or debarred parties. Recommendation: We recommend that the Office review all contracts to ensure the appropriate language exits regarding suspension and debarment regulations, and the Office should consider an annual review of SAM.gov for all vendors that are paid from federal awards. In addition, the Office should implement procedures to ensure that contracts paid with federal funds have the provision as required by Appendix II to Part 200, Title 2 - Contract Provisions for non-Federal Entity Contracts under Federal Awards. Views of responsible officials and planned corrective action: OPSO acknowledges the finding and appreciates the importance of maintaining documented verification of vendor eligibility and ensuring all federally required provisions are present in contracts funded by federal awards. We would like to clarify that the two vendors in question were not suspended or debarred according to SAM.gov records at the time of the audit. However, OPSO did not retain adequate documentation of the verification performed at the time of procurement, nor did we fully integrate all Appendix II provisions in the contract files reviewed. This deficiency did not result from intentional noncompliance but from gaps in procedural oversight and documentation retention stemming from historical procurement practices and limited internal controls over contract file completeness. Corrective Action Plan To address the finding and ensure full future compliance with 2 CFR § 180.300, § 200.326, and related guidance, OPSO has implemented the following corrective actions: 1. Contract File Documentation Protocol - Effective July 1, 2025, all procurement files for federal contracts exceeding $25,000 must include: • A printed or digitally archived screenshot of the SAM.gov record showing the vendor’s exclusion status. • A signed vendor eligibility certification form confirming the entity is not suspended, debarred, or otherwise excluded. • A signed checklist confirming inclusion of required Appendix II contract provisions. All contract files will be centrally stored and monitored by OPSO’s Procurement Division. 2. Updated Procurement Templates - OPSO has updated all procurement and contracting templates to: • Include the full list of required provisions from Appendix II to Part 200. • Add a standard Suspension and Debarment certification clause. • Automatically require review of the SAM.gov Exclusions List prior to final contract execution. 3. Staff Training and Compliance Oversight - All staff involved in procurement and grant-funded contracting were trained on federal procurement standards and suspension and debarment requirements on December 31, 2025. Refresher trainings will occur semi-annually and be required for new staff during onboarding. A pre-award compliance checklist has been instituted to ensure proper documentation and verification steps are followed and archived. 4. Post-Award Compliance Reviews - Beginning Q4 of Fiscal Year 2025, OPSO’s Internal Audit and Compliance Division will conduct quarterly reviews of all federal contract files to ensure: • Proper documentation of vendor eligibility. • Compliance with contract content requirements under 2 CFR Part 200. Findings will be reported directly to the Chief Financial Officer and Sheriff for corrective follow-up if deficiencies are found. Conclusion: OPSO remains fully committed to upholding all federal procurement and grant compliance standards. While this finding did not result in questioned costs, we recognize the risk it poses and have taken decisive action to enhance internal controls, training, and documentation standards. We appreciate the audit team’s diligence and remain available to provide any further documentation or clarification needed.
Department of the Treasury, Passed through the State of Michigan Federal Financial Assistance Listing 21.029, CPFFN0190, 2024 COVID-19 – Coronavirus Capital Projects Fund Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Criteria – Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition – In our testing of procurement, suspension, and debarment it was identified that the Cooperative’s written policy did not address the requirements of 2 CFR sections 200.318 through 200.326. Cause – Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with all of these requirements. Effect – A lack of compliant policies increases the overall risk of non-compliance. Questioned Costs – None reported. Context/Sampling – Overall procurement policy. Repeat Finding from Prior Years – No. Recommendation – We recommend that management establish a written policy that is in compliance with all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.326 and maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. Views of Responsible Officials – There is no disagreement with the audit finding.
Significant Deficiency and Material Instance of Non-Compliance: Finding 2024-001: Written Procurement Policy This finding impacts the procurement and suspension and debarment compliance requirement for the major program, Assistance Listing Number 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds funded by U.S. Department of the Treasury and passed through Massachusetts Technology Park Corporation. Criteria: According to 2 CFR 200.318–200.326, non-federal entities receiving Federal awards must establish and maintain written procurement policies and procedures. These policies must be consistent with Federal standards, including requirements for competitive bidding, documentation, and conflict-of-interest provisions. Condition: TGH did not have a written Federal procurement policy in place during 2024. Therefore, TGH did not adhere to Federal procurement requirements that ensure competitive, fair, and transparent procurement practices, nor did it implement the necessary documentation procedures to support procurement transactions. Cause: TGH’s internal control over procurement was inadequate and did not meet the specific requirements under 2 CFR 200.318. Effect: As a result of this noncompliance, there is an increased risk of improper procurement practices and the potential for misuse of Federal funds. While no improper procurements were identified during the audit, the lack of a procurement policy exposes TGH to risks of noncompliant procurement actions, such as non-competitive contracts, conflicts of interest, and insufficient documentation of procurement decisions. Was the finding a repeat of a findings in the immediate prior year?: No Questioned Costs: None Recommendation: We recommend that TGH develop and implement a written procurement policy in accordance with 2 CFR 200.318 to ensure compliance with Federal procurement requirements. The policy should include provisions for competitive bidding, applicable purchasing, procurement threshold, conflict-of-interest disclosure, and proper documentation of procurement actions. Additionally, TGH should provide training for procurement staff to ensure they understand and follow Federal procurement standards. Management Response: Management acknowledges the finding and concurs with the recommendation. TGH is in the process of developing and formalizing a comprehensive procurement policy that complies with the procurement standards outlined in 2 CFR 200.318–200.326 of the Uniform Guidance. The policy will address key areas such as allowable procurement methods, competition requirements, contract oversight, and verification against the Federal suspension and debarment list. Management anticipates that the procurement policy will be reviewed and approved by the appropriate oversight body by June 30, 2025, and staff will receive training on its implementation shortly thereafter. TGH is committed to strengthening internal controls over procurement to ensure continued compliance with Federal requirements.
Procurement, Suspension and Debarment Questioned Costs 14.218: $248,920 14.239: $1,172 Department of Housing and Urban Development 14.218 Community Development Block Grant 14.239 HOME Investment Partnership Program Grant No(s): B-21-MC-22-002,B-22-MC-22-002,B-23-MC-22-002,M-23-MC-22-0204 Criteria: Purchases made from federal grants must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 (the Uniform Guidance or UG). Purchases of services in excess of $250,000 should be made using one of two formal methods that are competitive and require public notice. Condition: The City-Parish paid for program management services in 2020 in the amount of $250,632 under a contract that has not recently undergone formal procurement methods. The purchases were made through amendment of an existing contract initially awarded using formal methods in 2019. Universe/ Population: These programs were not selected for audit as major programs. The contract relating to the costs were selected for audit in our general procurement compliance testing for all contracts, including those paid with federal and non-federal sources. Effect: The City-Parish may be non-compliant with the purchasing requirements of the Uniform Guidance with respect to this contract. Cause: Improper execution of established internal controls and a lack of adherence to policies. Recommendation: The City-Parish should strengthen controls to ensure all purchases undergo the appropriate competitive procurement processes. Views of Responsible Officials: The amendment in question did not constitute a material change in the scope, nature, or intent of the original procurement. The additional funding awarded was consistent with the original services solicited and did not involve new activities or substantially alter the deliverables or performance standards initially procured. As such, the amendment fell within the bounds of the original competitive process and was not required to be procured. The City-Parish procurement policy allows for amendments when they do not exceed the original scope of work or introduce fundamentally different services. The amendment was processed with full documentation of cost reasonableness, continued eligibility under the applicable grant program and internal approval. Therefore, we assert that the contract amendment was executed in accordance with both HUD and local procurement requirements and no formal procurement was necessary. To strengthen internal controls and ensure full alignment with federal procurement requirements, the OCD will document and reinforce internal procedures outlining when procurement is or is not required for amendments within the original scope. Procurement training is ongoing. The OCD staff will conduct refresher training with procurement and program personnel on contract amendment procedures and documentation requirements. Final Auditor Comments: It is acknowledged that similar services required under the initial contract are also to be provided under the amendments to the contract (grants management services). The original contract had a term of May 1, 2019 to April 30, 2022, at an amount not-to exceed $70,000, to perform grants management services for established HUD programs such as CDBG and HOME. However, amendments to this contract, made without being competitively bid (RFP), added administration services for the Emergency Rental Assistance Program undertaken in response to the COVID-19 pandemic. These amendments brought the total not-to exceed amount to $9,054,261 for all grant management services. While the Emergency Rental Assistance Program may have qualified for emergency procurement treatment, thereby not requiring competitive procurement, the HOME and CDBG program administration services may have been required to be competitively procured after the initial contract period ending April 30, 2022.
Procurement, Suspension and Debarment Questioned Costs 14.218: $248,920 14.239: $1,172 Department of Housing and Urban Development 14.218 Community Development Block Grant 14.239 HOME Investment Partnership Program Grant No(s): B-21-MC-22-002,B-22-MC-22-002,B-23-MC-22-002,M-23-MC-22-0204 Criteria: Purchases made from federal grants must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 (the Uniform Guidance or UG). Purchases of services in excess of $250,000 should be made using one of two formal methods that are competitive and require public notice. Condition: The City-Parish paid for program management services in 2020 in the amount of $250,632 under a contract that has not recently undergone formal procurement methods. The purchases were made through amendment of an existing contract initially awarded using formal methods in 2019. Universe/ Population: These programs were not selected for audit as major programs. The contract relating to the costs were selected for audit in our general procurement compliance testing for all contracts, including those paid with federal and non-federal sources. Effect: The City-Parish may be non-compliant with the purchasing requirements of the Uniform Guidance with respect to this contract. Cause: Improper execution of established internal controls and a lack of adherence to policies. Recommendation: The City-Parish should strengthen controls to ensure all purchases undergo the appropriate competitive procurement processes. Views of Responsible Officials: The amendment in question did not constitute a material change in the scope, nature, or intent of the original procurement. The additional funding awarded was consistent with the original services solicited and did not involve new activities or substantially alter the deliverables or performance standards initially procured. As such, the amendment fell within the bounds of the original competitive process and was not required to be procured. The City-Parish procurement policy allows for amendments when they do not exceed the original scope of work or introduce fundamentally different services. The amendment was processed with full documentation of cost reasonableness, continued eligibility under the applicable grant program and internal approval. Therefore, we assert that the contract amendment was executed in accordance with both HUD and local procurement requirements and no formal procurement was necessary. To strengthen internal controls and ensure full alignment with federal procurement requirements, the OCD will document and reinforce internal procedures outlining when procurement is or is not required for amendments within the original scope. Procurement training is ongoing. The OCD staff will conduct refresher training with procurement and program personnel on contract amendment procedures and documentation requirements. Final Auditor Comments: It is acknowledged that similar services required under the initial contract are also to be provided under the amendments to the contract (grants management services). The original contract had a term of May 1, 2019 to April 30, 2022, at an amount not-to exceed $70,000, to perform grants management services for established HUD programs such as CDBG and HOME. However, amendments to this contract, made without being competitively bid (RFP), added administration services for the Emergency Rental Assistance Program undertaken in response to the COVID-19 pandemic. These amendments brought the total not-to exceed amount to $9,054,261 for all grant management services. While the Emergency Rental Assistance Program may have qualified for emergency procurement treatment, thereby not requiring competitive procurement, the HOME and CDBG program administration services may have been required to be competitively procured after the initial contract period ending April 30, 2022.
Procurement, Suspension and Debarment Questioned Costs: $1,071,477 Department of the Treasury 21.027 Coronavirus State and Local Fiscal Recovery Program (SLFR) (COVID-19) Grant No(s): N/A Criteria: Purchases made from federal grants must follow the procurement standards of Title 2 CFR sections 200.318 through 200.326 (the Uniform Guidance or UG). The Louisiana State public bid law must also be followed, which requires purchases of equipment greater than $60,000 should be made using the sealed bid method. Condition: The City-Parish purchased police vehicles in the amount $1,071,477 without undergoing the bid process. Universe/ Population: Seventeen contracts totaling $13,644,485 were subjected to compliance testing. Two contracts totaling $1,071,477 were found to be noncompliant. Effect: The City-Parish may be non-compliant with the purchasing requirements of the Uniform Guidance and the Louisiana State public bid law with respect to this purchase. Cause: Improper execution of established internal controls and a lack of adherence to policies. Recommendation: The City-Parish should strengthen controls to ensure all purchases undergo the appropriate competitive procurement processes. View of Responsible Officials: The Purchasing Director for the City-Parish has the authority as provided by the Code of Ordinances to approve emergency purchases upon review of the certification of the emergency by the user department. At the beginning of 2024, the Baton Rouge Police Department noted its patrol units were in less than standard conditions and a recent Police Academy graduating class of sworn officers compounded the need for viable units. At the same time, a nationwide supply chain crisis limited the availability of vehicles for purchase. Multiple quote requests from vendors across Louisiana confirmed a lack of available inventory including the Louisiana State Contract vendor as well as a piggyback contract for the Jefferson Parish Sheriff’s Office. After an exhaustive search, a single vendor was located who had an inventory of matching vehicles on hand for offer within a limited time frame. In an effort to not compromise public safety, an emergency purchase was utilized which was signed by both the Police Chief and the Purchasing Director. As required, notice was given by publishing in the newspaper. Final Auditor Comments: While the views above cite local ordinances, state statutes still apply and give definition to situations that qualify as an emergency. The conditions under which the purchase was made may not qualify as an emergency, as defined by La R.S. 38:2211. Furthermore, La R.S. 38:2212 requires the emergency to be certified by the public entity. Louisiana Legislative Auditor’s published legal guidance indicates that this certification is to be taken through a public meeting. There was no certification of the emergency in a public meeting.
Finding 2024-003 – Material Weakness Award No.: Assistance List No. 15.555 and No. 15.074 Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation. AL No. 15.074 Passed-through the Del Puerto Water District. Compliance Requirement: Procurement, Suspension and Debarment. Condition: The following conditions were noted during the single audit: The District was not able to provide evidence that procurements for the Mendota Pool Fish Screen and Control Structure Project and Poso Canal Bridge Replacement Project design contractors under AL 15.555 met the requirements for adequate price competition and was unable to provide documentation confirming the sole-source solicitations met the requirements of Uniform Guidance. Specifically the District was unable to provide evidence it received enough statements of qualification to have adequate price competition or complied with one or more provisions of Section 200.210(c) that allows a sole source agreement to occur. It would appear the District would need evidence that the grantor approved the sole source procurement, but was not able to provide documentation of approvals of sole source procurements by the grantors. The District also was unable to provide documentation of the advertisement of the solicitation of requests for qualifications for the Fish Screen and Control Structure Project. The District was not able to provide adequate documentation that the Mendota Pool Fish Screen and Control Structure Project contract under AL 15.555 and Orestimba Creek Recharge and Recovery Expansion Project contract under AL 15.074 complied with Section 200.327 and appendix II to this part requiring federal contract provisions to be included in the approved contract. This resulted in the District not having evidence that the contractor certified it was in compliance with all required federal provisions. Criteria: Uniform Guidance states the following: Section 200.318(i) states that “The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractors selection or rejection, and the basis for the contract price.” Section 300.320(c) states “There are specific circumstances in which the recipient or subrecipient may use a noncompetitive procurement method. The noncompetitive procurement method may only be used if one of the following circumstances applies: (1) The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be fulfilled by a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from providing public notice of a competitive solicitation; (4) The recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity provides written approval; or (5) After soliciting several sources, competition is determined inadequate. The provisions of the Brooks Act (49 United State Code, Section 1104) require local agencies to award federally funded engineering and design related contracts, otherwise know as A&E contracts, on the basis of fair and open competitive negotiations, demonstrated competence, and professional qualifications (23 Code of Federal Regulations (CFR), Part 172) at a fair and reasonable price (48 CFR 31.201-3). Both federal regulation and California state law (Government Code 4525-4529 et a) require selection of A&E consultant services on the basis of demonstrated competence and professional qualifications. Procurement by noncompetitive proposals may be used only when the award of a contract is infeasible under small purchase procedures, sealed bids or competitive proposals, as cited above. Section 200.327 states “The non-federal entity’s contracts must contain the applicable provisions described in appendix II to this part.” Appendix II contains requirements to include in federally funded contracts termination for cause and convenience provisions, Equal Employment Opportunity provisions, Davis-Bacon Act provisions, Contract Work Hours and Safety Standards Act provisions, Clean Air Act provisions, debarment and suspension provisions, Byrd Anti-Lobbying Amendment provisions, and other provisions, as applicable. Cause: The current staff was not able to find procurement documentation prepared before they were hired. Effect: The District was unable to provide evidence that it was in compliance with the requirement to maintain documentation indicating the procurement was in compliance with Uniform Guidance Sections 200.318 to 200.327 and appendix II to this part. Context: The original procurement for the consulting firm for the Mendota Pool Fish Screens and Control Structure project was performed in September 2018 and awarded in late October 2018. This procurement precedes the current staff. Staff indicated the grantor approved the Mendota Pool Fish Screen and Control Structure Project sole source procurement and the Board Resolution approving the agreement indicated the grantor approved the sole source procurement, but staff was not able to provide proof of written approval by the grantor. Recommendation: We recommend management implement additional controls over the procurement process that ensures each procurement complies with Uniform Guidance Section 200.318 to 200.326, including training of staff working on procurements of the documentation retention and other requirements under the Uniform Guidance. We further recommend the District establish a procurement folder on its server with subfolder for each individual procurement where documentation of each procurement is maintained, including advertising of the procurement, requests for proposals/qualifications with language that satisfies Uniform Guidance requirements, proposals received, executed contracts, certifications of compliance with federal contracting provisions by the contractor if not part of the proposal or executed contracts, documented quantitative and qualitative analysis indicating why the recommended bid was selected for approval, management report to board recommending which bid should be approved, board resolution approving the winning bid and for contracts under $250,000 a memo or form documenting bids received and reason for selecting the bid, including reasons for not selecting the lowest bid if applicable. If a sole source procurement method is used, documentation showing the sole source procurement is allowable under criteria listed in Section 300.320(c) should be retained. Views of Responsible Officials and Planned Corrective Actions: Management’s response and planned corrective action is included in the Corrective Action Plan included at the end of the report.
Finding 2024-003 – Material Weakness Award No.: Assistance List No. 15.555 and No. 15.074 Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation. AL No. 15.074 Passed-through the Del Puerto Water District. Compliance Requirement: Procurement, Suspension and Debarment. Condition: The following conditions were noted during the single audit: The District was not able to provide evidence that procurements for the Mendota Pool Fish Screen and Control Structure Project and Poso Canal Bridge Replacement Project design contractors under AL 15.555 met the requirements for adequate price competition and was unable to provide documentation confirming the sole-source solicitations met the requirements of Uniform Guidance. Specifically the District was unable to provide evidence it received enough statements of qualification to have adequate price competition or complied with one or more provisions of Section 200.210(c) that allows a sole source agreement to occur. It would appear the District would need evidence that the grantor approved the sole source procurement, but was not able to provide documentation of approvals of sole source procurements by the grantors. The District also was unable to provide documentation of the advertisement of the solicitation of requests for qualifications for the Fish Screen and Control Structure Project. The District was not able to provide adequate documentation that the Mendota Pool Fish Screen and Control Structure Project contract under AL 15.555 and Orestimba Creek Recharge and Recovery Expansion Project contract under AL 15.074 complied with Section 200.327 and appendix II to this part requiring federal contract provisions to be included in the approved contract. This resulted in the District not having evidence that the contractor certified it was in compliance with all required federal provisions. Criteria: Uniform Guidance states the following: Section 200.318(i) states that “The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractors selection or rejection, and the basis for the contract price.” Section 300.320(c) states “There are specific circumstances in which the recipient or subrecipient may use a noncompetitive procurement method. The noncompetitive procurement method may only be used if one of the following circumstances applies: (1) The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be fulfilled by a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from providing public notice of a competitive solicitation; (4) The recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity provides written approval; or (5) After soliciting several sources, competition is determined inadequate. The provisions of the Brooks Act (49 United State Code, Section 1104) require local agencies to award federally funded engineering and design related contracts, otherwise know as A&E contracts, on the basis of fair and open competitive negotiations, demonstrated competence, and professional qualifications (23 Code of Federal Regulations (CFR), Part 172) at a fair and reasonable price (48 CFR 31.201-3). Both federal regulation and California state law (Government Code 4525-4529 et a) require selection of A&E consultant services on the basis of demonstrated competence and professional qualifications. Procurement by noncompetitive proposals may be used only when the award of a contract is infeasible under small purchase procedures, sealed bids or competitive proposals, as cited above. Section 200.327 states “The non-federal entity’s contracts must contain the applicable provisions described in appendix II to this part.” Appendix II contains requirements to include in federally funded contracts termination for cause and convenience provisions, Equal Employment Opportunity provisions, Davis-Bacon Act provisions, Contract Work Hours and Safety Standards Act provisions, Clean Air Act provisions, debarment and suspension provisions, Byrd Anti-Lobbying Amendment provisions, and other provisions, as applicable. Cause: The current staff was not able to find procurement documentation prepared before they were hired. Effect: The District was unable to provide evidence that it was in compliance with the requirement to maintain documentation indicating the procurement was in compliance with Uniform Guidance Sections 200.318 to 200.327 and appendix II to this part. Context: The original procurement for the consulting firm for the Mendota Pool Fish Screens and Control Structure project was performed in September 2018 and awarded in late October 2018. This procurement precedes the current staff. Staff indicated the grantor approved the Mendota Pool Fish Screen and Control Structure Project sole source procurement and the Board Resolution approving the agreement indicated the grantor approved the sole source procurement, but staff was not able to provide proof of written approval by the grantor. Recommendation: We recommend management implement additional controls over the procurement process that ensures each procurement complies with Uniform Guidance Section 200.318 to 200.326, including training of staff working on procurements of the documentation retention and other requirements under the Uniform Guidance. We further recommend the District establish a procurement folder on its server with subfolder for each individual procurement where documentation of each procurement is maintained, including advertising of the procurement, requests for proposals/qualifications with language that satisfies Uniform Guidance requirements, proposals received, executed contracts, certifications of compliance with federal contracting provisions by the contractor if not part of the proposal or executed contracts, documented quantitative and qualitative analysis indicating why the recommended bid was selected for approval, management report to board recommending which bid should be approved, board resolution approving the winning bid and for contracts under $250,000 a memo or form documenting bids received and reason for selecting the bid, including reasons for not selecting the lowest bid if applicable. If a sole source procurement method is used, documentation showing the sole source procurement is allowable under criteria listed in Section 300.320(c) should be retained. Views of Responsible Officials and Planned Corrective Actions: Management’s response and planned corrective action is included in the Corrective Action Plan included at the end of the report.
Finding 2024-003 – Material Weakness Award No.: Assistance List No. 15.555 and No. 15.074 Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation. AL No. 15.074 Passed-through the Del Puerto Water District. Compliance Requirement: Procurement, Suspension and Debarment. Condition: The following conditions were noted during the single audit: The District was not able to provide evidence that procurements for the Mendota Pool Fish Screen and Control Structure Project and Poso Canal Bridge Replacement Project design contractors under AL 15.555 met the requirements for adequate price competition and was unable to provide documentation confirming the sole-source solicitations met the requirements of Uniform Guidance. Specifically the District was unable to provide evidence it received enough statements of qualification to have adequate price competition or complied with one or more provisions of Section 200.210(c) that allows a sole source agreement to occur. It would appear the District would need evidence that the grantor approved the sole source procurement, but was not able to provide documentation of approvals of sole source procurements by the grantors. The District also was unable to provide documentation of the advertisement of the solicitation of requests for qualifications for the Fish Screen and Control Structure Project. The District was not able to provide adequate documentation that the Mendota Pool Fish Screen and Control Structure Project contract under AL 15.555 and Orestimba Creek Recharge and Recovery Expansion Project contract under AL 15.074 complied with Section 200.327 and appendix II to this part requiring federal contract provisions to be included in the approved contract. This resulted in the District not having evidence that the contractor certified it was in compliance with all required federal provisions. Criteria: Uniform Guidance states the following: Section 200.318(i) states that “The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractors selection or rejection, and the basis for the contract price.” Section 300.320(c) states “There are specific circumstances in which the recipient or subrecipient may use a noncompetitive procurement method. The noncompetitive procurement method may only be used if one of the following circumstances applies: (1) The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be fulfilled by a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from providing public notice of a competitive solicitation; (4) The recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity provides written approval; or (5) After soliciting several sources, competition is determined inadequate. The provisions of the Brooks Act (49 United State Code, Section 1104) require local agencies to award federally funded engineering and design related contracts, otherwise know as A&E contracts, on the basis of fair and open competitive negotiations, demonstrated competence, and professional qualifications (23 Code of Federal Regulations (CFR), Part 172) at a fair and reasonable price (48 CFR 31.201-3). Both federal regulation and California state law (Government Code 4525-4529 et a) require selection of A&E consultant services on the basis of demonstrated competence and professional qualifications. Procurement by noncompetitive proposals may be used only when the award of a contract is infeasible under small purchase procedures, sealed bids or competitive proposals, as cited above. Section 200.327 states “The non-federal entity’s contracts must contain the applicable provisions described in appendix II to this part.” Appendix II contains requirements to include in federally funded contracts termination for cause and convenience provisions, Equal Employment Opportunity provisions, Davis-Bacon Act provisions, Contract Work Hours and Safety Standards Act provisions, Clean Air Act provisions, debarment and suspension provisions, Byrd Anti-Lobbying Amendment provisions, and other provisions, as applicable. Cause: The current staff was not able to find procurement documentation prepared before they were hired. Effect: The District was unable to provide evidence that it was in compliance with the requirement to maintain documentation indicating the procurement was in compliance with Uniform Guidance Sections 200.318 to 200.327 and appendix II to this part. Context: The original procurement for the consulting firm for the Mendota Pool Fish Screens and Control Structure project was performed in September 2018 and awarded in late October 2018. This procurement precedes the current staff. Staff indicated the grantor approved the Mendota Pool Fish Screen and Control Structure Project sole source procurement and the Board Resolution approving the agreement indicated the grantor approved the sole source procurement, but staff was not able to provide proof of written approval by the grantor. Recommendation: We recommend management implement additional controls over the procurement process that ensures each procurement complies with Uniform Guidance Section 200.318 to 200.326, including training of staff working on procurements of the documentation retention and other requirements under the Uniform Guidance. We further recommend the District establish a procurement folder on its server with subfolder for each individual procurement where documentation of each procurement is maintained, including advertising of the procurement, requests for proposals/qualifications with language that satisfies Uniform Guidance requirements, proposals received, executed contracts, certifications of compliance with federal contracting provisions by the contractor if not part of the proposal or executed contracts, documented quantitative and qualitative analysis indicating why the recommended bid was selected for approval, management report to board recommending which bid should be approved, board resolution approving the winning bid and for contracts under $250,000 a memo or form documenting bids received and reason for selecting the bid, including reasons for not selecting the lowest bid if applicable. If a sole source procurement method is used, documentation showing the sole source procurement is allowable under criteria listed in Section 300.320(c) should be retained. Views of Responsible Officials and Planned Corrective Actions: Management’s response and planned corrective action is included in the Corrective Action Plan included at the end of the report.
Finding #24-001 – Significant Deficiency in Internal Control over Financial Reporting: Procurement Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: No formal Federal procurement policy has been adopted by the Town of Eagle, Colorado, resulting in a lack of internal controls over Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Per 2 CFR section 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 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). UG §200.318 General Procurement Standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, section of contract type, contractor selection or rejection, and the basis for the contract price. UG §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement: (a) Informal Procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement or property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is greater than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed Bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement-type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, had not adopted a formal Federal procurement policy as outlined in 2CFR sections 200.303 and 200.318 through 200.326, during the course of our federal single audit testing of transactions and contracts, we found that the Town’s general contract purchase procedures that were followed meet the requirements of the Uniform Guidance and that no contracts were awarded without proper justification in 7 or 7 procurement transactions tested. Cause: Management was not aware of the requirement of adopting a formal Federal procurement policy under the procurement standards set out at 2CFR sections 200.303 and 200.318 through 200.626 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to procurement. Recommendation: We recommend that the Town of Eagle, Colorado, adopts a formal Federal procurement policy to include all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will adopt a formal Federal procurement policy which includes all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626.
Finding #24-003 – Procurement Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: No formal Federal procurement policy has been adopted by the Town of Eagle, Colorado, resulting in a lack of compliance with Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Per 2 CFR section 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 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). UG §200.318 General Procurement Standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, section of contract type, contractor selection or rejection, and the basis for the contract price. UG §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement: (a) Informal Procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement or property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is greater than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed Bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement-type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, had not adopted a formal Federal procurement policy as outlined in 2CFR sections 200.303 and 200.318 through 200.326, during the course of our federal single audit testing of transactions and contracts, we found that the Town’s general contract purchase procedures that were followed meet the requirements of the Uniform Guidance and that no contracts were awarded without proper justification in 7 or 7 procurement transactions tested. Cause: Management was not aware of the requirement of adopting a formal Federal procurement policy under the procurement standards set out at 2CFR sections 200.303 and 200.318 through 200.626 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to procurement. Recommendation: We recommend that the Town of Eagle, Colorado, adopts a formal Federal procurement policy to include all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will adopt a formal Federal procurement policy which includes all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626.
Finding #24-001 – Significant Deficiency in Internal Control over Financial Reporting: Procurement Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: No formal Federal procurement policy has been adopted by the Town of Eagle, Colorado, resulting in a lack of internal controls over Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Per 2 CFR section 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 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). UG §200.318 General Procurement Standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, section of contract type, contractor selection or rejection, and the basis for the contract price. UG §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement: (a) Informal Procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement or property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is greater than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed Bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement-type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, had not adopted a formal Federal procurement policy as outlined in 2CFR sections 200.303 and 200.318 through 200.326, during the course of our federal single audit testing of transactions and contracts, we found that the Town’s general contract purchase procedures that were followed meet the requirements of the Uniform Guidance and that no contracts were awarded without proper justification in 7 or 7 procurement transactions tested. Cause: Management was not aware of the requirement of adopting a formal Federal procurement policy under the procurement standards set out at 2CFR sections 200.303 and 200.318 through 200.626 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to procurement. Recommendation: We recommend that the Town of Eagle, Colorado, adopts a formal Federal procurement policy to include all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will adopt a formal Federal procurement policy which includes all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626.
Finding #24-003 – Procurement Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: No formal Federal procurement policy has been adopted by the Town of Eagle, Colorado, resulting in a lack of compliance with Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Per 2 CFR section 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 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). UG §200.318 General Procurement Standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, section of contract type, contractor selection or rejection, and the basis for the contract price. UG §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement: (a) Informal Procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement or property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is greater than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed Bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement-type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, had not adopted a formal Federal procurement policy as outlined in 2CFR sections 200.303 and 200.318 through 200.326, during the course of our federal single audit testing of transactions and contracts, we found that the Town’s general contract purchase procedures that were followed meet the requirements of the Uniform Guidance and that no contracts were awarded without proper justification in 7 or 7 procurement transactions tested. Cause: Management was not aware of the requirement of adopting a formal Federal procurement policy under the procurement standards set out at 2CFR sections 200.303 and 200.318 through 200.626 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to procurement. Recommendation: We recommend that the Town of Eagle, Colorado, adopts a formal Federal procurement policy to include all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will adopt a formal Federal procurement policy which includes all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626.
Federal Program Name: Research and Development Cluster: Uniformed Services University Medical Research Projects Federal Agency: U.S. Department of Defense Federal Assistance Listing Number: 12.750 Criteria or Specific Requirement: Procurement, Suspension and Debarment Condition: The Organization’s policies do not contain adequate documentation to demonstrate compliance with federal procurement, and suspension and debarment regulations. Effect: Without adequate procurement policies and documentation of suspension and debarment checks, the auditee may inadvertently award contracts to ineligible vendors. Questioned Costs: None Context: The Organization’s documented procurement policies do not contain all of the specific requirements of 2 CFR sections 200.318 through 200.326. Additionally, the Organization’s policies do not contain all the specific requirements of 2 CFR sections 180 and 200.14 regarding suspension and debarment. Cause: The writing of the policy did not take into account the federal procurement, suspension and debarment regulations which are required to be incorporated for items procured with federal funds. Repeat Finding: No Recommendation: We recommend that the Organization revise its policies to incorporate all required elements of the federal procurement, suspension and debarment regulations. Views of Responsible Officials and Planned Corrective Action: The Organization agrees with the comment and will revise its policies to incorporate all required elements of the federal procurement, suspension and debarment regulations.
Federal Program Name: Research and Development Cluster: Uniformed Services University Medical Research Projects Federal Agency: U.S. Department of Defense Federal Assistance Listing Number: 12.750 Criteria or Specific Requirement: Procurement, Suspension and Debarment Condition: The Organization’s policies do not contain adequate documentation to demonstrate compliance with federal procurement, and suspension and debarment regulations. Effect: Without adequate procurement policies and documentation of suspension and debarment checks, the auditee may inadvertently award contracts to ineligible vendors. Questioned Costs: None Context: The Organization’s documented procurement policies do not contain all of the specific requirements of 2 CFR sections 200.318 through 200.326. Additionally, the Organization’s policies do not contain all the specific requirements of 2 CFR sections 180 and 200.14 regarding suspension and debarment. Cause: The writing of the policy did not take into account the federal procurement, suspension and debarment regulations which are required to be incorporated for items procured with federal funds. Repeat Finding: No Recommendation: We recommend that the Organization revise its policies to incorporate all required elements of the federal procurement, suspension and debarment regulations. Views of Responsible Officials and Planned Corrective Action: The Organization agrees with the comment and will revise its policies to incorporate all required elements of the federal procurement, suspension and debarment regulations.
Federal Program Name: Research and Development Cluster: Uniformed Services University Medical Research Projects Federal Agency: U.S. Department of Defense Federal Assistance Listing Number: 12.750 Criteria or Specific Requirement: Procurement, Suspension and Debarment Condition: The Organization’s policies do not contain adequate documentation to demonstrate compliance with federal procurement, and suspension and debarment regulations. Effect: Without adequate procurement policies and documentation of suspension and debarment checks, the auditee may inadvertently award contracts to ineligible vendors. Questioned Costs: None Context: The Organization’s documented procurement policies do not contain all of the specific requirements of 2 CFR sections 200.318 through 200.326. Additionally, the Organization’s policies do not contain all the specific requirements of 2 CFR sections 180 and 200.14 regarding suspension and debarment. Cause: The writing of the policy did not take into account the federal procurement, suspension and debarment regulations which are required to be incorporated for items procured with federal funds. Repeat Finding: No Recommendation: We recommend that the Organization revise its policies to incorporate all required elements of the federal procurement, suspension and debarment regulations. Views of Responsible Officials and Planned Corrective Action: The Organization agrees with the comment and will revise its policies to incorporate all required elements of the federal procurement, suspension and debarment regulations.
Federal Program Name: Research and Development Cluster: Uniformed Services University Medical Research Projects Federal Agency: U.S. Department of Defense Federal Assistance Listing Number: 12.750 Criteria or Specific Requirement: Procurement, Suspension and Debarment Condition: The Organization’s policies do not contain adequate documentation to demonstrate compliance with federal procurement, and suspension and debarment regulations. Effect: Without adequate procurement policies and documentation of suspension and debarment checks, the auditee may inadvertently award contracts to ineligible vendors. Questioned Costs: None Context: The Organization’s documented procurement policies do not contain all of the specific requirements of 2 CFR sections 200.318 through 200.326. Additionally, the Organization’s policies do not contain all the specific requirements of 2 CFR sections 180 and 200.14 regarding suspension and debarment. Cause: The writing of the policy did not take into account the federal procurement, suspension and debarment regulations which are required to be incorporated for items procured with federal funds. Repeat Finding: No Recommendation: We recommend that the Organization revise its policies to incorporate all required elements of the federal procurement, suspension and debarment regulations. Views of Responsible Officials and Planned Corrective Action: The Organization agrees with the comment and will revise its policies to incorporate all required elements of the federal procurement, suspension and debarment regulations.
U.S. Department of Agriculture Passed through the Alabama State Department of Education Program: Summer Food Service Program CFDA: 10.559 Grant Number: AF6-0000 Noncompliance/Significant Deficiency Procurement Criteria Per 2 CFR 200.318-200.326, non-federal entities must follow federal procurement standards when acquiring goods and services, including adherence to competition requirements and proper documentation. Condition During our audit of procurement activities, we identified purchases made from two food vendors that exceeded the micro-purchase threshold of $10,000. There was no evidence that the entity obtained price comparisons or quotations from other sources prior to selecting these vendors. Each vendor was used repeatedly throughout the year, and the cumulative totals were $38,998. Cause Staff believed that long-standing relationships with vendors or prior approvals were sufficient and did not realize that federal procurement rules still apply annually. Effect Failure to follow small purchase procedures increases the risk of overpaying for goods and may affect allowability of expenditures charged to the program. Recommendation We recommend the entity train staff on federal procurement guidelines. Purchases from vendors should be forecasted at the beginning of each grant period. Procurement guidelines should be followed for all vendors from which it is reasonably foreseeable that total purchases will exceed $10,000. Documentation should be maintained for all price quotations and comparisons reviewed prior to purchases for items exceeding the micro-purchase threshold. Management's Response Management acknowledges the importance of adhering to federal procurement standards, including the requirement for competitive pricing and documentation for purchases exceeding the micro-purchase threshold
Federal Agency: U.S. Department of Health and Human Services Assistance Listing Numbers: 21.027 & 93.623 Federal Program Titles: Coronavirus State and Local Fiscal Recovery Funds; Basic Center Grant Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations 2 CFR 200.318, General procurement standards, requires that non-Federal entities must have documented procurement procedures, consistent with State and local laws and regulations for the acquisition of property or services required under a federal award and subaward. The non-Federal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.318 through 200.326. Condition: During our testing, we noted that the Organization’s procurement policy did not address all of the identified requirements in 2 CFR 200.318 through 200.326. Questioned Costs: None. Context: In our review of the current procurement policy, The Adams Group, LLC noted the following: • The policy did not include documented procedures for purchases above the simplified acquisition threshold ($250,000) in accordance with 2 CFR 200.320b. • The policy did not include documented procedures for the use and instances of noncompetitive procurement in accordance with 2 CFR 200.320c. • The policy did not include documented procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded as outlined in 2 CFR sections 200.212 and 200.318. • We also noted that the Organization did not verify that the entities with which it entered into contracts were not debarred, suspended, or otherwise excluded. Effect: The Organization’s procurement policy is not in compliance with general procurement standards, and proper verification procedures for potentially suspended or debarred entities were not performed. Repeat Finding: This is a repeat finding. Recommendation: We recommend that the Organization update their procurement policy to address all requirements identified in 2 CFR 200.318 through 200.326. Views of Responsible Officials: Management agrees with the finding.
Federal Agency: U.S. Department of Health and Human Services Assistance Listing Numbers: 21.027 & 93.623 Federal Program Titles: Coronavirus State and Local Fiscal Recovery Funds; Basic Center Grant Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations 2 CFR 200.318, General procurement standards, requires that non-Federal entities must have documented procurement procedures, consistent with State and local laws and regulations for the acquisition of property or services required under a federal award and subaward. The non-Federal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.318 through 200.326. Condition: During our testing, we noted that the Organization’s procurement policy did not address all of the identified requirements in 2 CFR 200.318 through 200.326. Questioned Costs: None. Context: In our review of the current procurement policy, The Adams Group, LLC noted the following: • The policy did not include documented procedures for purchases above the simplified acquisition threshold ($250,000) in accordance with 2 CFR 200.320b. • The policy did not include documented procedures for the use and instances of noncompetitive procurement in accordance with 2 CFR 200.320c. • The policy did not include documented procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded as outlined in 2 CFR sections 200.212 and 200.318. • We also noted that the Organization did not verify that the entities with which it entered into contracts were not debarred, suspended, or otherwise excluded. Effect: The Organization’s procurement policy is not in compliance with general procurement standards, and proper verification procedures for potentially suspended or debarred entities were not performed. Repeat Finding: This is a repeat finding. Recommendation: We recommend that the Organization update their procurement policy to address all requirements identified in 2 CFR 200.318 through 200.326. Views of Responsible Officials: Management agrees with the finding.
Department of Treasury Federal Financial Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Immaterial Instance of Noncompliance Criteria – Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition – In our testing of procurement, suspension and debarment it was identified that the City did not have a written policy on procurement that satisfied the requirements of 2 CFR sections 200.318 through 200.326. Cause – Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections and controls were not adequately designed to ensure compliance with all of these requirements. Effect – A lack of documented policies increase the overall risk that employees are not aware of the specific requirements with contracting and awarding contracts to lower tier entities. Questioned Costs – None reported Context/Sampling – All vendors, which totaled one, were selected for procurement testing. Repeat Finding from Prior Years – Yes Recommendation – Management should establish a written policy that addresses all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.326 and maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. View of responsible officials – Management is in agreement with the finding.
Finding 2024-003 Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: Department of Health and Human Services Program Titles: Community Funded Projects Assistance Listing Number: 93.493 Pass-Through Entity: N/A Award Numbers: H79FG001026 and H79FG001037 Award Periods: September 30, 2023 through September 29, 2024 Criteria Internal controls requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance) , Subpart D ‐ Post Federal Award Requirements, Section 200.318 through 200.326 Internal Controls, require that a non‐Federal entity use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. The procurement procedures must include the following: - Using the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the nonfederal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). - For acquisitions exceeding the simplified acquisition threshold, using one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of the circumstances are met, in accordance with 2 CFR section 200.320(c)). - Using Noncompetitive procurement only if one or more of the following circumstances apply: · The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; · The item is available only from a single source; · The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; · The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the nonfederal entity; or · After solicitation of a number of sources, competition is determined inadequate PDA’s procurement policy also requires a verification that vendors and sub-recipients are not suspended or debarred by checking the website of the System for Award Management and documentation of such verification maintained by the Finance Office. Condition/Context While PDA has established a procurement policy, it does not fully conform to Federal law and the Uniform Guidance for the following reasons: - Micro purchase threshold is not explicitly defined, although it is mentioned that cost and price analysis shall be made and documented in connection with every procurement action above $5,000. - The policy does not have clear provisions for maintaining detailed procurement records. Such records should include the rationale for the procurement method, the selection of contract type, the contractor selection or rejection process, and the basis for the contract price. - The simplified acquisition threshold is not defined and does not incorporate all relevant elements including sealed bids method. The total misstatement is the entire population amount $1,546,725 as PDA did not maintain sufficient documentation to evidence history of procurement for all procurements. Cause PDA’s procurement policy does not seem to have been reviewed against the Uniform Guidance for compliance. Internal controls over maintaining sufficient records to detail the history of procurement including noncompetitive justification and suspension and debarment verification were found to be insufficient. Effect The absence of a policy that fully conformed to the Uniform Guidance resulted in noncompliance issues such as records sufficient to detail the history of procurement transactions not maintained. Questioned Costs $1,546,725 Repeat Finding Yes Recommendation We recommend PDA implement measures to ensure that its procurement policy reflect applicable state and local laws and regulations conforming to applicable federal statutes and requirement in 2 CFR part 200. Management should ensure procurement transactions are documented in such detail to evidence the method of procurement use and vendor verification for suspension and debarment.
Finding 2024-003 Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: Department of Health and Human Services Program Titles: Community Funded Projects Assistance Listing Number: 93.493 Pass-Through Entity: N/A Award Numbers: H79FG001026 and H79FG001037 Award Periods: September 30, 2023 through September 29, 2024 Criteria Internal controls requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance) , Subpart D ‐ Post Federal Award Requirements, Section 200.318 through 200.326 Internal Controls, require that a non‐Federal entity use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. The procurement procedures must include the following: - Using the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the nonfederal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). - For acquisitions exceeding the simplified acquisition threshold, using one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of the circumstances are met, in accordance with 2 CFR section 200.320(c)). - Using Noncompetitive procurement only if one or more of the following circumstances apply: · The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; · The item is available only from a single source; · The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; · The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the nonfederal entity; or · After solicitation of a number of sources, competition is determined inadequate PDA’s procurement policy also requires a verification that vendors and sub-recipients are not suspended or debarred by checking the website of the System for Award Management and documentation of such verification maintained by the Finance Office. Condition/Context While PDA has established a procurement policy, it does not fully conform to Federal law and the Uniform Guidance for the following reasons: - Micro purchase threshold is not explicitly defined, although it is mentioned that cost and price analysis shall be made and documented in connection with every procurement action above $5,000. - The policy does not have clear provisions for maintaining detailed procurement records. Such records should include the rationale for the procurement method, the selection of contract type, the contractor selection or rejection process, and the basis for the contract price. - The simplified acquisition threshold is not defined and does not incorporate all relevant elements including sealed bids method. The total misstatement is the entire population amount $1,546,725 as PDA did not maintain sufficient documentation to evidence history of procurement for all procurements. Cause PDA’s procurement policy does not seem to have been reviewed against the Uniform Guidance for compliance. Internal controls over maintaining sufficient records to detail the history of procurement including noncompetitive justification and suspension and debarment verification were found to be insufficient. Effect The absence of a policy that fully conformed to the Uniform Guidance resulted in noncompliance issues such as records sufficient to detail the history of procurement transactions not maintained. Questioned Costs $1,546,725 Repeat Finding Yes Recommendation We recommend PDA implement measures to ensure that its procurement policy reflect applicable state and local laws and regulations conforming to applicable federal statutes and requirement in 2 CFR part 200. Management should ensure procurement transactions are documented in such detail to evidence the method of procurement use and vendor verification for suspension and debarment.
Finding Number: 2024-001 Finding Type: Federal award finding Federal Assistance Listing No.: 15.685 Program Name: National Fish Passage Federal Agency: U.S. Department of the Interior Federal Grant Number: F24C01411-00 Federal Award Year: 2024 Pass-through entity: Rogue River Watershed Council Grant Number: 205 Control Deficiency Type: Significant deficiency in internal controls and instances of non-compliance Instances of Noncompliance: Yes Compliance Requirement: Procurement, suspension and debarment Questioned Costs: None Repeat Finding: No Criteria: A non-federal organization must follow its own documented procurement procedures, provided they comply with applicable state and local laws and align with the federal standards outlined in 2 CFR 200.318–200.327 (“Uniform Guidance”). Specifically, 2 CFR 200.318(i) requires entities to maintain records sufficient to detail the history of the procurement, including but not limited to the rationale for the procurement method chosen, the basis for selecting or rejecting contractors, and the justification for the contract price. In addition, all procurement transactions must be conducted in a manner providing full and open competition. Furthermore, federal requirements prohibit grant recipients from contracting with, or purchasing from, contractors who are suspended and debarred from doing business with the federal government. Whenever the organization enters into contracts or purchases goods or services with federal funds that it expects to equal or exceed $25,000, it must verify that the contractor or vendor has not been suspended, debarred or otherwise excluded. Finally, the organization must ensure that all federal programs comply with Section 70914 of the Build America, Buy America (BABA) Act for infrastructure projects. Condition: The organization has enacted a written procurement policy and management believed that it met all the standards required under 2 CFR 200.318 through 200.326. However, the policy failed to include some of the most stringent requirements included in the Uniform Guidance, and the organization did not comply with all the documentation requirements laid out in its procurement policy. More specifically, the organization did not maintain written thorough documentation of the procurement process as stated in 2 CFR 200.318(i), nor publicized the request for proposal in accordance with 2 CFR 200.319. Finally, the contract funded under the major program did not incorporate the mandatory BABA Act compliance language. Cause: As this was the entity’s first federal audit, WaterWatch was unaware of some procurement requirements outlined in the Uniform Guidance that needed to be incorporated into its procurement policies and procedures. Furthermore, the entity was new to the federal procurement environment. Regarding suspension and debarment, and the BABA Act, the organization was generally aware of these requirements and believed it had achieved compliance. However, WaterWatch was not aware of the need to perform documented formal verification regarding debarment beyond regularly sharing information in their existing networks of restoration agency and NGOs which rely on the same pool of experience contractors. Regarding BABA, WaterWatch was not aware of the specific documentation requirements. WaterWatch did not add the required contract language regarding BABA or debarment. In addition, due to the limited number of contractors performing this type of work, only four contractors responded to this particular request for proposal and only one submitted a bid. As a result, WaterWatch did not generate their comparison-based procurement process written documentation. Effect: The organization did not comply with some of the procurement, suspension and debarment requirement as outline in the Uniform Guidance. Audit Recommendation: We recommend that management review its current procurement policy to ensure that all procurement activities fully comply with the federal regulations, as well as establish additional procedure and oversight mechanism to ensure that procurement activities fully comply with the organization’s policies. Management’s Response: The following corrective actions are being immediately implemented for contracts in WaterWatch’s restoration program in order to achieve compliance: 1. Language requiring all contractors to comply with the Build America, Buy America (BABA) Act is added to all new WaterWatch contracts and all current contracts via amendment. 2. Language requiring all contractors to comply with federal suspension and debarment contracting standards is added to all new WaterWatch contracts and all current contracts via amendment. 3. WaterWatch will keep formal documentation of debarment searches for all contractors. 4. WaterWatch will keep formal documentation of contractor procurement process in both Southern Oregon and Portland offices.
Finding Number: 2024-001 Finding Type: Federal award finding Federal Assistance Listing No.: 15.685 Program Name: National Fish Passage Federal Agency: U.S. Department of the Interior Federal Grant Number: F24C01411-00 Federal Award Year: 2024 Pass-through entity: Rogue River Watershed Council Grant Number: 205 Control Deficiency Type: Significant deficiency in internal controls and instances of non-compliance Instances of Noncompliance: Yes Compliance Requirement: Procurement, suspension and debarment Questioned Costs: None Repeat Finding: No Criteria: A non-federal organization must follow its own documented procurement procedures, provided they comply with applicable state and local laws and align with the federal standards outlined in 2 CFR 200.318–200.327 (“Uniform Guidance”). Specifically, 2 CFR 200.318(i) requires entities to maintain records sufficient to detail the history of the procurement, including but not limited to the rationale for the procurement method chosen, the basis for selecting or rejecting contractors, and the justification for the contract price. In addition, all procurement transactions must be conducted in a manner providing full and open competition. Furthermore, federal requirements prohibit grant recipients from contracting with, or purchasing from, contractors who are suspended and debarred from doing business with the federal government. Whenever the organization enters into contracts or purchases goods or services with federal funds that it expects to equal or exceed $25,000, it must verify that the contractor or vendor has not been suspended, debarred or otherwise excluded. Finally, the organization must ensure that all federal programs comply with Section 70914 of the Build America, Buy America (BABA) Act for infrastructure projects. Condition: The organization has enacted a written procurement policy and management believed that it met all the standards required under 2 CFR 200.318 through 200.326. However, the policy failed to include some of the most stringent requirements included in the Uniform Guidance, and the organization did not comply with all the documentation requirements laid out in its procurement policy. More specifically, the organization did not maintain written thorough documentation of the procurement process as stated in 2 CFR 200.318(i), nor publicized the request for proposal in accordance with 2 CFR 200.319. Finally, the contract funded under the major program did not incorporate the mandatory BABA Act compliance language. Cause: As this was the entity’s first federal audit, WaterWatch was unaware of some procurement requirements outlined in the Uniform Guidance that needed to be incorporated into its procurement policies and procedures. Furthermore, the entity was new to the federal procurement environment. Regarding suspension and debarment, and the BABA Act, the organization was generally aware of these requirements and believed it had achieved compliance. However, WaterWatch was not aware of the need to perform documented formal verification regarding debarment beyond regularly sharing information in their existing networks of restoration agency and NGOs which rely on the same pool of experience contractors. Regarding BABA, WaterWatch was not aware of the specific documentation requirements. WaterWatch did not add the required contract language regarding BABA or debarment. In addition, due to the limited number of contractors performing this type of work, only four contractors responded to this particular request for proposal and only one submitted a bid. As a result, WaterWatch did not generate their comparison-based procurement process written documentation. Effect: The organization did not comply with some of the procurement, suspension and debarment requirement as outline in the Uniform Guidance. Audit Recommendation: We recommend that management review its current procurement policy to ensure that all procurement activities fully comply with the federal regulations, as well as establish additional procedure and oversight mechanism to ensure that procurement activities fully comply with the organization’s policies. Management’s Response: The following corrective actions are being immediately implemented for contracts in WaterWatch’s restoration program in order to achieve compliance: 1. Language requiring all contractors to comply with the Build America, Buy America (BABA) Act is added to all new WaterWatch contracts and all current contracts via amendment. 2. Language requiring all contractors to comply with federal suspension and debarment contracting standards is added to all new WaterWatch contracts and all current contracts via amendment. 3. WaterWatch will keep formal documentation of debarment searches for all contractors. 4. WaterWatch will keep formal documentation of contractor procurement process in both Southern Oregon and Portland offices.
Department of the Treasury, Passed through the State of Michigan Federal Financial Assistance Listing 21.029, CV0019120, 2024 COVID-19 – Coronavirus Capital Projects Fund Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria – Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition – In our testing of procurement, suspension, and debarment it was identified that the Cooperative’s written policy did not address the requirements of 2 CFR sections 200.318 through 200.326. In addition, the Cooperative did not follow procurement, suspension, and debarment procedures required under the Uniform Guidance prior to entering into contracts with vendors. Cause – Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with all of these requirements. Effect – A lack of compliant policies and procedures increases the overall risk of non-compliance. Questioned Costs – None reported. Context/Sampling – Overall procurement, suspension, and debarment process. Repeat Finding from Prior Years – No. Recommendation – We recommend that management establish a written policy that is in compliance with all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.326 and maintain adequate supporting documentation and records to document history and methods of procurement, suspension, and debarment procedures performed to comply with these CFR sections. Views of Responsible Officials – There is no disagreement with the audit finding.
Federal Program 594 Environmental Infrastructure Assistance Program (AL #12.U01) Drinking Water State Revolving Fund (AL #66.468) Procurement, Suspension, and Debarment Criteria Per Uniform Guidance, “Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR section 200.318 through 200.326. They must use their own documented procurement procedures, which reflect appliable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Furthermore, “Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. Condition During testing, we noted that the City does not have a procurement policy in place that follows Uniform Guidance. Also, we noted that the City entered into two covered transactions with vendors who were not reviewed for suspension and debarment before entering into these transactions. Questioned Costs None. Context The City does not have a procurement policy that follows Uniform Guidance. Also, we tested two vendors who were not reviewed for suspension and debarment from a population of two. Cause Management oversight. Effect The City is not in compliance with Uniform Guidance. Also, there is an increased risk of the City entering into a covered transaction with an entity that is suspended or debarred from receiving federal funds. Repeat Finding Yes. Prior audit finding 2023-005. Recommendation The City should implement a written procurement policy that follows Uniform Guidance. Furthermore, vendors should be reviewed for suspension and debarment before entering into a covered transaction. View of Responsible Officials The City agrees with the recommendation.
Federal Program 594 Environmental Infrastructure Assistance Program (AL #12.U01) Drinking Water State Revolving Fund (AL #66.468) Procurement, Suspension, and Debarment Criteria Per Uniform Guidance, “Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR section 200.318 through 200.326. They must use their own documented procurement procedures, which reflect appliable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Furthermore, “Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. Condition During testing, we noted that the City does not have a procurement policy in place that follows Uniform Guidance. Also, we noted that the City entered into two covered transactions with vendors who were not reviewed for suspension and debarment before entering into these transactions. Questioned Costs None. Context The City does not have a procurement policy that follows Uniform Guidance. Also, we tested two vendors who were not reviewed for suspension and debarment from a population of two. Cause Management oversight. Effect The City is not in compliance with Uniform Guidance. Also, there is an increased risk of the City entering into a covered transaction with an entity that is suspended or debarred from receiving federal funds. Repeat Finding Yes. Prior audit finding 2023-005. Recommendation The City should implement a written procurement policy that follows Uniform Guidance. Furthermore, vendors should be reviewed for suspension and debarment before entering into a covered transaction. View of Responsible Officials The City agrees with the recommendation.
2024-005 Finding – Federal Award Type: Procurement – Material Non-Compliance and Material Weakness in Internal Control over Compliance. (Repeat of finding 2023-005) Identification of Federal Program: AL Number: 81.086 Conservation Research and Development Program Criteria / Requirement: Per 2 CFR sections 200.318 through 200.326 an entity receiving federal funds must follow their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition / Context: During the audit it was noted that Forth Mobility Fund has an established Procurement Policy which incorporates procurement requirements identified in 2 CFF Part 200. However, of the 3 items selected for testing, all 3 did not follow the Procurement Policy. Either a sufficient number of quotes were not obtained or proper documentation was not maintained. Cause: While the Procurement Policy is documented, the procedures and policies were not being followed. Effect: Failure to maintain sufficient internal controls and proper procedures may result in wrongful use of federal funds and non-compliance with federal awards. Questioned Costs: None. Recommendation: The Organization should follow the establish written policies and procedures regarding procurement and properly document the process for each procurement made. Management’s Response: We agree with the auditor's comments and have taken steps to strengthen compliance with procurement policies. We have established additional documentation requirements for all procurements and will update our policies to incorporate explicit internal controls and approval processes. Staff involved in procurement will also receive guidance on these updated requirements.
Federal Agency: U.S. Department of State Federal Program Name: Professional and Cultural Exchange Programs - Citizen Exchanges Assistance Listing Number: 19.415 Award Period: July 26, 2022- September 30, 2025; September 14, 2022- September 30, 2026 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: The Foundation must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: The procurement policy of the Foundation does not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None Context: We reviewed the procurement policy of the Foundation and noted that the policy does not include the essential compliance elements as outlined in 2 CFR sections 200.318 through 200.326. Cause: Management was unaware of the restrictive requirements of the new procurement standards. Effect: With the absence of a compliant policy, the Foundation is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Foundation review its procurement policy and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials: Management is not in agreement with the finding. See separate corrective action plan.
Federal Agency: U.S. Department of State Federal Program Name: Professional and Cultural Exchange Programs - Citizen Exchanges Assistance Listing Number: 19.415 Award Period: July 26, 2022- September 30, 2025; September 14, 2022- September 30, 2026 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: The Foundation must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: The procurement policy of the Foundation does not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None Context: We reviewed the procurement policy of the Foundation and noted that the policy does not include the essential compliance elements as outlined in 2 CFR sections 200.318 through 200.326. Cause: Management was unaware of the restrictive requirements of the new procurement standards. Effect: With the absence of a compliant policy, the Foundation is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Foundation review its procurement policy and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials: Management is not in agreement with the finding. See separate corrective action plan.
United States Department of Agriculture Federal Assistance Listing #10.855 Distance Learning and Telemedicine Grants United States Department of Treasury Federal Assistance Listing #21.029 COVID-19 Coronavirus Capital Projects Fund Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Criteria - Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition - In our testing of procurement, suspension, and debarment it was identified that the Cooperative’s written policy did not address the requirements of 2 CFR sections 200.318 through 200.326. Cause - Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with all of these requirements. Effect - A lack of compliant policies increases the overall risk of non-compliance. Questioned Costs - None reported. Context – Sampling was not used. Repeat Finding from Prior Years - No Recommendation - We recommend that management establish a written policy that is in compliance with all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.326 and maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. Views of Responsible Officials - There is no disagreement with the audit finding.
United States Department of Agriculture Federal Assistance Listing #10.855 Distance Learning and Telemedicine Grants United States Department of Treasury Federal Assistance Listing #21.029 COVID-19 Coronavirus Capital Projects Fund Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Criteria - Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition - In our testing of procurement, suspension, and debarment it was identified that the Cooperative’s written policy did not address the requirements of 2 CFR sections 200.318 through 200.326. Cause - Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with all of these requirements. Effect - A lack of compliant policies increases the overall risk of non-compliance. Questioned Costs - None reported. Context – Sampling was not used. Repeat Finding from Prior Years - No Recommendation - We recommend that management establish a written policy that is in compliance with all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.326 and maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. Views of Responsible Officials - There is no disagreement with the audit finding.
Criteria: Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The Organization did not provide a procurement policy. Cause: The Organization does not have internal controls in place surrounding procurement policies and procedures. Effect: The lack of internal controls surrounding the procurement policies and procedures could lead to potential funding issues in the future. Questioned Costs: None. Recommendation: We recommend that management establish a formal written procurement policy. Organization’s Response: Management agrees with this finding.
Criteria: Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The Organization did not provide a procurement policy. Cause: The Organization does not have internal controls in place surrounding procurement policies and procedures. Effect: The lack of internal controls surrounding the procurement policies and procedures could lead to potential funding issues in the future. Questioned Costs: None. Recommendation: We recommend that management establish a formal written procurement policy. Organization’s Response: Management agrees with this finding.
Criteria: Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The Organization did not provide a procurement policy. Cause: The Organization does not have internal controls in place surrounding procurement policies and procedures. Effect: The lack of internal controls surrounding the procurement policies and procedures could lead to potential funding issues in the future. Questioned Costs: None. Recommendation: We recommend that management establish a formal written procurement policy. Organization’s Response: Management agrees with this finding.
Criteria: Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The Organization was not able to provide a procurement policy for the year ended December 31, 2024. Cause: The Organization does not have internal controls in place surrounding procurement policies and procedures. Effect: The lack of internal controls surrounding the procurement policies and procedures could lead to potential funding issues in the future. Questioned Costs: None. Recommendation: We recommend that management prepare a procurement policy that aligns with the Uniform Guidance and continue to implement additional control processes in order to ensure proper controls are in place and followed. Organization Response: Management agrees with this finding.
2024 001 Reporting and Procurement U.S. Department of the Treasury: Passed-through State of New Jersey Department of Community Affairs: COVID 19 Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Contract Number and Years: G2022 09 (03/02/2021 – 12/31/2026) Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample Repeat Finding: Yes (2023-001) Finding Type: Material Weakness, Material Noncompliance Criteria Reporting Per 2 CFR 200.502, the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non Federal statutes, regulations and the terms and conditions of Federal awards, such as: expenditures/expense transactions associated with awards including grants. Further, the Uniform Guidance compliance supplement notes, each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the Federal awarding agency. In accordance with the grant agreement and the reporting requirements for the State of New Jersey Department of Community Affairs, direct grants and pass through funds are fulfilled utilizing an advanced payment method and tracking reports. The grantee shall submit quarterly financial reports, in a format to be provided by the Department, and including the number of government full time employees responding to COVID 19 as supported by this funding. The reports are prepared and submitted to allow for relevant and reliable information to be provided to the Federal government or State of New Jersey for tracking purposes. The reports are the source documents for the grantee to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the grantee’s financial statements in accordance with 2 CFR 200.502, Basis for determining Federal awards expended, for the SEFA. Procurement Non Federal entities other than states, including those operating Federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR Part 200. A non Federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis Bacon Act)). Small purchase procedures are used for purchases that exceed the micro purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro purchases may be awarded without soliciting competitive quotations if the non Federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). In accordance with the grant agreement and the reporting requirements for the State of New Jersey Department of Community Affairs, recipients may use award funds to enter into contracts to procure goods and services necessary to implement one or more of the eligible purposes outlined in sections 602(c) and 603(c) of the Act and Treasury’s Interim Final Rule and Final Rule. As such, recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance. Under the program, St. Joseph’s Health, Inc. must follow the procurement standards in 2 CFR sections 200.318 through 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. Internal Control Additionally, in accordance with Federal requirements, a non Federal entity shall maintain internal controls over Federal programs designed to provide reasonable assurance that transactions are executed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award that could have a direct and material effect on a Federal program. Condition and Context Reporting On a quarterly basis, St. Joseph’s Health, Inc. (the System) prepares and reports to New Jersey Department of Community Affairs (the Department) the program expenditures for Federal funding amounts on the tracking report of expenditures, which are then used to prepare the annual SEFA in conjunction with the general ledger detail at the end of the fiscal year. While expenditures per the SEFA as prepared by the System were accurate and the quarterly reporting was accepted by the State, the System’s expenditures per the report of expenditures continue to be based upon purchase order amounts, which include expenditures that were incurred subsequent to year end. Procurement Further, the System engaged multiple vendors for several projects under the G2022 09 grant that were above the $10K micro purchase threshold, but below the simplified acquisition threshold. However, the System did not obtain multiple quotes from different vendors to encourage fair competition in the market. The System’s policies and procedures to ensure compliance with the above compliance requirements did not include certain internal controls that were designed properly and operating effectively to ensure that the System properly reported costs on the report of expenditures or obtained the necessary quotes from potential bidders for procurements over the micro purchase threshold. Cause Management’s review of the submitted quarterly report of expenditures continuing not to be identified the need for a reconciliation of incurred expenditures and purchase order balances reported to the Department and as such, as there is a variance between the amounts reported on the SEFA and the amounts reported to the Department on the quarterly reports of approximately $2.1 million. We noted, however, that this variance did not represent any unallowable costs. Additionally, Management did not retain or obtain the required documentation indicating quotes from multiple vendors were obtained for the ongoing construction projects under the grant. Effect The System had a material variance in the amount of expenditures reported to the Department as compared to the SEFA and did not obtain multiple quotations from vendors when making selections for various projects ongoing under the Federal program. Questioned Costs None Recommendation Reporting We recommend that the System strengthen its processes and internal controls to ensure the tracking of each report of expenditures provided to the Department has a reconciliation of the amount of expenditures incurred in the period based upon the general ledger and accounting records, used to prepare the annual SEFA, as compared to the purchase order balances. Procurement We recommend that the System strengthen its processes and internal controls to ensure that all procurement related transactions are supported by the appropriate bidding documentation as required by the Uniform Guidance for each respective bidding threshold. View of Responsible Official Management agrees with the auditor’s recommendations and will strengthen its processes and internal controls to ensure the report of expenditures provided to the Department has a reconciliation of the amount of expenditures incurred in the period compared to the purchase order balances and all procurement transactions contain the required bidding documentation for each bidding threshold in accordance with the Uniform Guidance.
Finding Number: 2024-001 Repeat Finding: No Type of Finding: Significant Deficiency Description: Procurement and Suspension and Debarment Questioned cost: No Criteria: Under 2 CFR sections 180.220 and 200.318 through 200.326, 45 CFR 75.327 through 75.334 and 45 CFR 75 Part E, the Organization is required to implement certain written Procurement and Suspension and Debarment policies and procedures that adhere to the minimum Federal Procurement standards. The Organization must use its own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements outlined in Uniform Guidance and maintain sufficient records to detail the history of procurements. Condition: The Organization's policy did not meet all of the minimum federal requirements under Uniform Guidance. Cause: Historically the Organization has received few federal grants subject to the Uniform Guidance, and while the Organization maintained a written procurement policy, it did not meet certain requirements of the Guidance. Effect: The Organization was not in compliance with federal regulations. Recommendation: The Organization should update their procurement policy to meet the minimum federal requirements and ensure procurement policies are being followed for all procurement levels with written documentation. View of Responsible Officials: Management has developed a policy in 2025.
Finding 2024-003 (Material Weakness) Program: Crime Victim Assistance Federal Agency: Department of Justice (DOJ) AL #: 16.575 Federal Award Identification Number and Year: Various – See SEFA Pass-through Entity: Missouri Department of Social Services Type of Compliance Finding: I - Procurement, Suspension, & Debarment Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200 and they must not be suspended or debarred. Condition/Context During our audit of the Organization’s fiscal year ended December 31, 2024 federal award program, we noted the Organization did not follow their documented procurement procedures for approving one contractor. Cause Management did not follow their procurement procedures for approving contractors / vendors. Effect Potential repayment of federal funds. Questioned Costs $120,489 Is the finding a repeat finding No Recommendations We recommend that Management follow their documented procurement procedures. Views of Responsible Officials / Planned Corrective Actions Management agrees with the finding. See Corrective Action Plan on Organization’s letterhead