U.S. Department of Treasury Federal Financial Assistance Listing 21.027 All Awards State and Local Fiscal Recovery Funds 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 Organization 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: Overall procurement policy. Repeat Finding from Prior Year: No. Recommendation: We recommend that management 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. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Federal Financial Assistance Listing 21.027 All Awards State and Local Fiscal Recovery Funds 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 there was no review of vendors to ensure that they are not suspended or debarred before purchases are made. In addition, there was no review of contracts entered into to ensure they included all requirements of the applicable CFR. 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 compliance policies increases the overall risk of non-compliance. Questioned Costs: None reported. Context/Sampling: Overall procurement policy. Repeat Finding from Prior Year: No. Recommendation: We recommend that management establish a formal process to review vendors before purchases are made to ensure they are not suspended or debarred and are in compliance with the Uniform Guidance and 2 CFR sections 200.318 through 200.326. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Federal Financial Assistance Listing 21.027 All Awards State and Local Fiscal Recovery Funds 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 Organization 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: Overall procurement policy. Repeat Finding from Prior Year: No. Recommendation: We recommend that management 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. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Federal Financial Assistance Listing 21.027 All Awards State and Local Fiscal Recovery Funds 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 there was no review of vendors to ensure that they are not suspended or debarred before purchases are made. In addition, there was no review of contracts entered into to ensure they included all requirements of the applicable CFR. 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 compliance policies increases the overall risk of non-compliance. Questioned Costs: None reported. Context/Sampling: Overall procurement policy. Repeat Finding from Prior Year: No. Recommendation: We recommend that management establish a formal process to review vendors before purchases are made to ensure they are not suspended or debarred and are in compliance with the Uniform Guidance and 2 CFR sections 200.318 through 200.326. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Federal Financial Assistance Listing 21.027 All Awards State and Local Fiscal Recovery Funds 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 Organization 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: Overall procurement policy. Repeat Finding from Prior Year: No. Recommendation: We recommend that management 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. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Federal Financial Assistance Listing 21.027 All Awards State and Local Fiscal Recovery Funds 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 there was no review of vendors to ensure that they are not suspended or debarred before purchases are made. In addition, there was no review of contracts entered into to ensure they included all requirements of the applicable CFR. 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 compliance policies increases the overall risk of non-compliance. Questioned Costs: None reported. Context/Sampling: Overall procurement policy. Repeat Finding from Prior Year: No. Recommendation: We recommend that management establish a formal process to review vendors before purchases are made to ensure they are not suspended or debarred and are in compliance with the Uniform Guidance and 2 CFR sections 200.318 through 200.326. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Federal Financial Assistance Listing 21.027 All Awards State and Local Fiscal Recovery Funds 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 Organization 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: Overall procurement policy. Repeat Finding from Prior Year: No. Recommendation: We recommend that management 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. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Federal Financial Assistance Listing 21.027 All Awards State and Local Fiscal Recovery Funds 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 there was no review of vendors to ensure that they are not suspended or debarred before purchases are made. In addition, there was no review of contracts entered into to ensure they included all requirements of the applicable CFR. 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 compliance policies increases the overall risk of non-compliance. Questioned Costs: None reported. Context/Sampling: Overall procurement policy. Repeat Finding from Prior Year: No. Recommendation: We recommend that management establish a formal process to review vendors before purchases are made to ensure they are not suspended or debarred and are in compliance with the Uniform Guidance and 2 CFR sections 200.318 through 200.326. Views of Responsible Officials: Management agrees with the finding.
Criteria or specific requirement: Per 2 CFR section 200.326, 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. Condition: The contracts and subcontracts did not include the required prevailing wage rate provisions. Context: For all 11 contracts tested, prevailing wage rate clauses were missing in both the contracts or subcontracts. However, the City did obtain certified weekly payrolls from all contractors tested. Questioned costs: Undetermined. Cause: The City failed to adhere to established internal controls over wage rate requirements and related regulations. Effect: Excluding the required prevailing wage rate information in contracts and subcontracts may cause vendors to be uninformed about specific program regulations that apply to the funds they receive. Recommendation: The City should review and enhance its policies and procedures to ensure that all required wage rate provisions are consistently included in contracts and subcontracts. Views of responsible officials: The City agrees with this finding. See separate Corrective Action Plan related to this finding.
AL No: 20.507 Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Cluster - Direct Award. Compliance Requirement: Procurement, Suspension and Debarment. Condition: The District was unable to provide documentation of the evaluation each proposal received and reason for selection of the winning bid for the procurement of a consulting firm to conduct the site selection study for the Woodland Transit Center project. The District also did not include a Debarment and Suspension clause in the request for proposal or contract and did not require a certificate confirming the contractor was not debarred in the final agreement. The District was not able to find records of the District verifying that the awarded consulting firm is not on the governmentwide exclusions in the System for Award Management (SAM). Criteria: 2 CFR Part 200 Subpart E (Uniform Guidance) states the following: Section 200.318(a) states that “The non-federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or service required under a Federal award or subaward. The non-Federal entity’s documented procurement procedures must conform to the procurement standards identified in Sections 200.317 through 200.327.” 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, contractor selection or rejection, and the basis for the contract price.” Section 200.327 states that “The recipient's or subrecipient's contracts must contain the applicable provisions described in Appendix II of this part.” Appendix II(H) includes “Debarment and Suspension (Executive Orders 12549 and 12689)—A contract award (see 2 CFR 180.220) must not be made to parties listed on the governmentwide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp., p. 189) and 12689 (3 CFR part 1989 Comp., p. 235), “Debarment and Suspension.” SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549.” 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 Uniform Guidance requirement to maintain documentation of procurement procedures. Context: The original procurement for the consulting firm for the Woodland Transit Project was performed in late December 2017 and awarded in January 2018 and then extended during 2024. This procurement precedes the current staff. It was verified the contractor selected was not debarred during the 2024 single audit. Recommendation: We recommend the District establish a procurement folder on its server with subfolders for each individual procurement where documentation of each procurement is maintained, including advertising of the procurement, requests for proposals, proposals received, analysis of reasons for selecting the winning bid, executed contract, certifications by contractor if not part of the proposal or executed contract, 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. We also recommend training be provided to staff that work on procurements of the requirements under Uniform Guidance Section 2 CFR 200.318 to 200.326. View of Responsible Officials and Planned Corrective Action: Management’s response and planned corrective action is included at the Corrective Action Plan end of this report.
Finding Number: 2024‐004 Repeat Finding: Yes, 2023‐002 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization 15.042 A23AV00840 n/a Indian School Student Transportation 15.044 A23AV00840 n/a Federal Agency: U.S. Department of the Interior Pass‐Through Agency: Bureau of Indian Affairs Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement and Suspension and 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 §§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 School had adopted procurement policies mandated under 2 CFR §215.43, but did not perform some of the procedures outlined for purchases. Cause Proper documentation was not obtained or maintained by the School. The School has not implemented controls to perform the collection of quotes, suspension and debarment checks for vendors, and maintaining conflict of interest files. Effect The School was not always in compliance with Board adopted policies and federal regulations and guidelines. Context The sample was not intended to be, and was not, a statistically valid sample. During our review of disbursements, we noted the following: The School did not maintain suspension and debarment for purchases over $25,000 during the year. For three of five purchases reviewed in the written quote range, written quotes for purchases over $2,500 were not obtained. For three sealed proposals reviewed, the District did not maintain documentation. For one of five purchases reviewed in the written quote range, the expenditure was not reviewed/approved by an authorized person prior to the purchase date. Recommendation The School should follow its adopted procurement procedures to ensure full and open competition among prospective vendors and adherence to federal rules and regulations. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐004 Repeat Finding: Yes, 2023‐002 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization 15.042 A23AV00840 n/a Indian School Student Transportation 15.044 A23AV00840 n/a Federal Agency: U.S. Department of the Interior Pass‐Through Agency: Bureau of Indian Affairs Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement and Suspension and 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 §§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 School had adopted procurement policies mandated under 2 CFR §215.43, but did not perform some of the procedures outlined for purchases. Cause Proper documentation was not obtained or maintained by the School. The School has not implemented controls to perform the collection of quotes, suspension and debarment checks for vendors, and maintaining conflict of interest files. Effect The School was not always in compliance with Board adopted policies and federal regulations and guidelines. Context The sample was not intended to be, and was not, a statistically valid sample. During our review of disbursements, we noted the following: The School did not maintain suspension and debarment for purchases over $25,000 during the year. For three of five purchases reviewed in the written quote range, written quotes for purchases over $2,500 were not obtained. For three sealed proposals reviewed, the District did not maintain documentation. For one of five purchases reviewed in the written quote range, the expenditure was not reviewed/approved by an authorized person prior to the purchase date. Recommendation The School should follow its adopted procurement procedures to ensure full and open competition among prospective vendors and adherence to federal rules and regulations. Views of Responsible Officials See Corrective Action Plan.
Material noncompliance and material weakness in internal control over compliance with procurement and suspension and debarment procedures meeting the requirements of 2 CFR Part 200. Federal Agency: Department of Health and Human Services Program Title: Substance Abuse and Mental Health Services Projects of Regional and National Significance Assistance Listing Number: 93.732 Award Numbers and Years: All awards 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 requirement identified in 2 CFR Part 200. Condition/Context The Organization has not enacted a procurement policy which meets the requirements of CFR 200.317 through 200.327. As a result, the Organization could not produce documentation of the history of the procurement, including justification of the procurement method and performance of a suspension and debarment search. The Organizations major program had a single vendor in which the aggregate purchases as part of the contract was greater than the micro-purchase threshold. The Organization determined at the time of procurement that due to the specialized nature of on-site medical professional services being procured that the contract could only be fulfilled by a single source. Cause The Organization did not have internal controls in place to ensure that the Organization’s procurement policy met the requirement of the Uniform Guidance. Effect The Organization entered into agreements to procure goods and services for which no documentation was retained to support the history of the procurement and did not meet the requirement of the Uniform Guidance. Questioned Costs $0 Repeat Finding Not a repeat finding. Recommendation We recommend the Organization implement policies and procedures for procuring goods and services under federal awards that meet the requirements of the Uniform Guidance. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Material noncompliance and material weakness in internal control over compliance with procurement and suspension and debarment procedures meeting the requirements of 2 CFR Part 200. Federal Agency: Department of Health and Human Services Program Title: Substance Abuse and Mental Health Services Projects of Regional and National Significance Assistance Listing Number: 93.732 Award Numbers and Years: All awards 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 requirement identified in 2 CFR Part 200. Condition/Context The Organization has not enacted a procurement policy which meets the requirements of CFR 200.317 through 200.327. As a result, the Organization could not produce documentation of the history of the procurement, including justification of the procurement method and performance of a suspension and debarment search. The Organizations major program had a single vendor in which the aggregate purchases as part of the contract was greater than the micro-purchase threshold. The Organization determined at the time of procurement that due to the specialized nature of on-site medical professional services being procured that the contract could only be fulfilled by a single source. Cause The Organization did not have internal controls in place to ensure that the Organization’s procurement policy met the requirement of the Uniform Guidance. Effect The Organization entered into agreements to procure goods and services for which no documentation was retained to support the history of the procurement and did not meet the requirement of the Uniform Guidance. Questioned Costs $0 Repeat Finding Not a repeat finding. Recommendation We recommend the Organization implement policies and procedures for procuring goods and services under federal awards that meet the requirements of the Uniform Guidance. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Finding Number: 2024-002 Repeat Finding: Yes – 2023-001, 2022-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2019-036 AZ-2023-001-00 N/A Formula Grants for Rural Areas and Trial Transit Program 20.509 CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agencies: Arizona Department of Transportation, Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and 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 §§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. The Board adopted a Policies and Procedures Manual that requires formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid of proposal. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views Of Responsible Officials See Corrective Action Plan.
Finding Number: 2024-002 Repeat Finding: Yes – 2023-001, 2022-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2019-036 AZ-2023-001-00 N/A Formula Grants for Rural Areas and Trial Transit Program 20.509 CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agencies: Arizona Department of Transportation, Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and 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 §§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. The Board adopted a Policies and Procedures Manual that requires formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid of proposal. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views Of Responsible Officials See Corrective Action Plan.
Finding Number: 2024-002 Repeat Finding: Yes – 2023-001, 2022-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2019-036 AZ-2023-001-00 N/A Formula Grants for Rural Areas and Trial Transit Program 20.509 CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agencies: Arizona Department of Transportation, Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and 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 §§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. The Board adopted a Policies and Procedures Manual that requires formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid of proposal. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views Of Responsible Officials See Corrective Action Plan.
Finding Number: 2024-002 Repeat Finding: Yes – 2023-001, 2022-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2019-036 AZ-2023-001-00 N/A Formula Grants for Rural Areas and Trial Transit Program 20.509 CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agencies: Arizona Department of Transportation, Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and 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 §§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. The Board adopted a Policies and Procedures Manual that requires formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid of proposal. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views Of Responsible Officials See Corrective Action Plan.
Finding Number: 2024-002 Repeat Finding: Yes – 2023-001, 2022-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2019-036 AZ-2023-001-00 N/A Formula Grants for Rural Areas and Trial Transit Program 20.509 CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agencies: Arizona Department of Transportation, Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and 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 §§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. The Board adopted a Policies and Procedures Manual that requires formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid of proposal. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views Of Responsible Officials See Corrective Action Plan.
Finding Number: 2024-002 Repeat Finding: Yes – 2023-001, 2022-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2019-036 AZ-2023-001-00 N/A Formula Grants for Rural Areas and Trial Transit Program 20.509 CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agencies: Arizona Department of Transportation, Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and 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 §§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. The Board adopted a Policies and Procedures Manual that requires formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid of proposal. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views Of Responsible Officials See Corrective Action Plan.
Finding Number: 2024-002 Repeat Finding: Yes – 2023-001, 2022-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2019-036 AZ-2023-001-00 N/A Formula Grants for Rural Areas and Trial Transit Program 20.509 CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agencies: Arizona Department of Transportation, Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and 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 §§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. The Board adopted a Policies and Procedures Manual that requires formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid of proposal. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views Of Responsible Officials See Corrective Action Plan.
Finding Number: 2024-002 Repeat Finding: Yes – 2023-001, 2022-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2019-036 AZ-2023-001-00 N/A Formula Grants for Rural Areas and Trial Transit Program 20.509 CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agencies: Arizona Department of Transportation, Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and 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 §§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. The Board adopted a Policies and Procedures Manual that requires formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid of proposal. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views Of Responsible Officials See Corrective Action Plan.
Finding Number: 2024-002 Repeat Finding: Yes – 2023-001, 2022-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X132, AZ-90-X-143, AZ-2018-003-00, AZ-2019-010-00, AZ-2019-035, AZ-2019-036 AZ-2023-001-00 N/A Formula Grants for Rural Areas and Trial Transit Program 20.509 CA-2022-231-00, GRT-22-0008862-T N/A Federal Agency: Department of Transportation Pass-Through Agencies: Arizona Department of Transportation, Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension, and 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 §§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. The Board adopted a Policies and Procedures Manual that requires formal bid procedures for purchases over $100,000. Condition The Authority did not follow its Board adopted Policies and Procedures Manual or federal regulations. Cause YCIPTA was operating under an expired contract and did not follow Board-adopted policies. Effect YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. Context For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid of proposal. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. Views Of Responsible Officials See Corrective Action Plan.
Finding Reference 2024-03 Assistance Listing Number 20.205 Highway Planning and Construction (Federal-Aid Highway Program) Name of Federal Agency Department of Transportation Compliance Requirement Special Tests and Provisions – Wage Rate Requirements Type of Finding: Significant Deficiency on Internal Control and Noncompliance Condition: From a sample of twenty-five payroll periods of construction projects examined, we noticed the following: 1) For one construction project, the contractor's payroll for the week of July 3, 2023, through July 9, 2023, was certified on July 27, 2023, exceeding the weekly certification requirement outlined in the Uniform Guidance. 2) For one construction project, the subcontractor's payroll for the week of July 3, 2023, through July 9, 2023, was certified on August 4, 2023, exceeding the weekly certification requirement outlined in the Uniform Guidance. 3) For one construction project, the contractor’s payroll for the week of November 13, 2023, through November 19, 2023, was certified on November 27, 2023, exceeding the weekly certification requirement outlined in the Uniform Guidance. 4) For one construction project, the contractor’s payroll for the week of June 24, 2024, through June 30, 2024, was certified on July 17, 2024, exceeding the weekly certification requirement outlined in the Uniform Guidance. This is a repeat finding from prior year 2023. Although this finding was originally not reported in the 2023 Single Audit Report, during the current audit, we became aware that this issue also involved 2023. Therefore, the 2023 Single Audit Report is in the process of being reissued. In the reissued 2023 Single Audit Report, the finding will be identified as No. 2023-05. Criteria: In accordance with the 2024 Compliance Supplement: 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). Cause: The delays in the certification of payroll weeks are due to several factors, including: Inefficient payroll processing procedures within the contractor or subcontractor's system. Lack of oversight and monitoring by the Authority to ensure timely certification of payrolls. Miscommunication between the contractor, subcontractor, and the Authority regarding certification deadlines. Effect: The failure to certify payrolls on a weekly basis as required by federal regulations can lead to noncompliance with federal regulations, specifically the Davis-Bacon Act and related Department of Labor (DOL) regulations and increased risk of wage underpayments or miscalculations, which may result in financial liabilities for the entity. Questioned Costs: None Recommendation: To address the identified issues, the following corrective actions are recommended: Implement a Payroll Monitoring System: Establish automated tracking mechanisms to ensure payrolls are certified and submitted within the required weekly timeframe. Enhance Oversight and Compliance Reviews: Designate a compliance officer or team responsible for verifying that certified payrolls are submitted on time. Perform regular internal audits to identify and correct compliance issues promptly. Provide Training for Contractors and Subcontractors: Conduct mandatory training sessions on Davis- Bacon Act requirements and payroll certification processes. Ensure all responsible staff understand the federal regulations governing wage rate compliance. Improve Communication Between Stakeholders: Establish clear communication channels between contractors, subcontractors, and the Authority. Require periodic status updates to ensure timely payroll submission. Views of Responsible Officials Refer to Management’s unaudited corrective action plan.
2024-004 Program: Highway Planning and Construction Financial Assistance Listing Number: 20.205 Federal Agency: U.S. Department of Transportation Pass-through: California Department of Transportation Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Material Weakness in Internal Control over Compliance and Instance of Noncompliance 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 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). 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the receipt and review of certified payrolls. Condition: We noted for eight (8) out of eight (8) certified payrolls selected for testing, the City did not document their review and approval of certified payroll submission. In addition, for two (2) out of eight (8) weeks of certified payroll selected for testing, we noted the contractor or subcontractor did not submit the certified payroll in a timely manner. Cause: The City’s procedures did not include documenting the review of the certified payroll received. In addition, the City did not have the necessary internal controls in place to ensure the contractor’s and subcontractor’s timely submittal of certified payroll. Effect: Ineffective procedures over this area of compliance could result in noncompliance with the wage rate compliance requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Sampling was used. We selected eight (8) of twenty-one (21) certified payrolls for testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City strengthen its internal controls to ensure that timely reviews of certified payroll submissions are being performed by the City. This could include performing procedures to ensure that information being provided to the City by its consultant project managers is accurate and that the required certified payroll is being submitted by contractors and subcontractors in a timely manner. View of Responsible Official and Planned Corrective Actions The City concurs with the finding. See separate corrective action plan.
2024-004 Program: Highway Planning and Construction Financial Assistance Listing Number: 20.205 Federal Agency: U.S. Department of Transportation Pass-through: California Department of Transportation Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Material Weakness in Internal Control over Compliance and Instance of Noncompliance 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 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). 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the receipt and review of certified payrolls. Condition: We noted for eight (8) out of eight (8) certified payrolls selected for testing, the City did not document their review and approval of certified payroll submission. In addition, for two (2) out of eight (8) weeks of certified payroll selected for testing, we noted the contractor or subcontractor did not submit the certified payroll in a timely manner. Cause: The City’s procedures did not include documenting the review of the certified payroll received. In addition, the City did not have the necessary internal controls in place to ensure the contractor’s and subcontractor’s timely submittal of certified payroll. Effect: Ineffective procedures over this area of compliance could result in noncompliance with the wage rate compliance requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Sampling was used. We selected eight (8) of twenty-one (21) certified payrolls for testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City strengthen its internal controls to ensure that timely reviews of certified payroll submissions are being performed by the City. This could include performing procedures to ensure that information being provided to the City by its consultant project managers is accurate and that the required certified payroll is being submitted by contractors and subcontractors in a timely manner. View of Responsible Official and Planned Corrective Actions The City concurs with the finding. See separate corrective action plan.
2024-004 Program: Highway Planning and Construction Financial Assistance Listing Number: 20.205 Federal Agency: U.S. Department of Transportation Pass-through: California Department of Transportation Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Material Weakness in Internal Control over Compliance and Instance of Noncompliance 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 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). 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the receipt and review of certified payrolls. Condition: We noted for eight (8) out of eight (8) certified payrolls selected for testing, the City did not document their review and approval of certified payroll submission. In addition, for two (2) out of eight (8) weeks of certified payroll selected for testing, we noted the contractor or subcontractor did not submit the certified payroll in a timely manner. Cause: The City’s procedures did not include documenting the review of the certified payroll received. In addition, the City did not have the necessary internal controls in place to ensure the contractor’s and subcontractor’s timely submittal of certified payroll. Effect: Ineffective procedures over this area of compliance could result in noncompliance with the wage rate compliance requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Sampling was used. We selected eight (8) of twenty-one (21) certified payrolls for testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City strengthen its internal controls to ensure that timely reviews of certified payroll submissions are being performed by the City. This could include performing procedures to ensure that information being provided to the City by its consultant project managers is accurate and that the required certified payroll is being submitted by contractors and subcontractors in a timely manner. View of Responsible Official and Planned Corrective Actions The City concurs with the finding. See separate corrective action plan.
2024-004 Program: Highway Planning and Construction Financial Assistance Listing Number: 20.205 Federal Agency: U.S. Department of Transportation Pass-through: California Department of Transportation Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Material Weakness in Internal Control over Compliance and Instance of Noncompliance 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 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). 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the receipt and review of certified payrolls. Condition: We noted for eight (8) out of eight (8) certified payrolls selected for testing, the City did not document their review and approval of certified payroll submission. In addition, for two (2) out of eight (8) weeks of certified payroll selected for testing, we noted the contractor or subcontractor did not submit the certified payroll in a timely manner. Cause: The City’s procedures did not include documenting the review of the certified payroll received. In addition, the City did not have the necessary internal controls in place to ensure the contractor’s and subcontractor’s timely submittal of certified payroll. Effect: Ineffective procedures over this area of compliance could result in noncompliance with the wage rate compliance requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Sampling was used. We selected eight (8) of twenty-one (21) certified payrolls for testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City strengthen its internal controls to ensure that timely reviews of certified payroll submissions are being performed by the City. This could include performing procedures to ensure that information being provided to the City by its consultant project managers is accurate and that the required certified payroll is being submitted by contractors and subcontractors in a timely manner. View of Responsible Official and Planned Corrective Actions The City concurs with the finding. See separate corrective action plan.
2024-004 Program: Highway Planning and Construction Financial Assistance Listing Number: 20.205 Federal Agency: U.S. Department of Transportation Pass-through: California Department of Transportation Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Material Weakness in Internal Control over Compliance and Instance of Noncompliance 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 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). 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the receipt and review of certified payrolls. Condition: We noted for eight (8) out of eight (8) certified payrolls selected for testing, the City did not document their review and approval of certified payroll submission. In addition, for two (2) out of eight (8) weeks of certified payroll selected for testing, we noted the contractor or subcontractor did not submit the certified payroll in a timely manner. Cause: The City’s procedures did not include documenting the review of the certified payroll received. In addition, the City did not have the necessary internal controls in place to ensure the contractor’s and subcontractor’s timely submittal of certified payroll. Effect: Ineffective procedures over this area of compliance could result in noncompliance with the wage rate compliance requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Sampling was used. We selected eight (8) of twenty-one (21) certified payrolls for testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City strengthen its internal controls to ensure that timely reviews of certified payroll submissions are being performed by the City. This could include performing procedures to ensure that information being provided to the City by its consultant project managers is accurate and that the required certified payroll is being submitted by contractors and subcontractors in a timely manner. View of Responsible Official and Planned Corrective Actions The City concurs with the finding. See separate corrective action plan.
2024-003 Program: Nationally Significant Freight and Highway Projects Financial Assistance Listing Number: 20.934 Federal Agency: U.S. Department of Transportation Pass-through: California Department of Transportation Award Year: Multiple Grant Award Number: Multiple Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Material Weakness in Internal Control over Compliance and Material Instance of Noncompliance 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 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. 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the receipt and review of certified payrolls. Condition: In March 2024, the City implemented procedural changes to their certified payroll review process. Until February 2024, the City did not retain evidence to document the individual who reviewed the certified payroll for each week in which work was performed by construction contractors and subcontractors. Due to backlog, the City was not able to catch up on certifications until August 2024 which was after the fiscal year had ended. For fifty-four (54) of sixty (60) weeks of certified payroll submissions selected for testing, we noted that the City did not review the contractors’ submissions of certified payroll in a timely manner. For six (6) out of sixty (60) weeks of certified payroll submissions selected, we noted that a statement of non-performance was submitted. However, the tracking spreadsheet provided to the City by its 3rd party project manager indicated that work had been performed. For nineteen (19) out of sixty (60) weeks of certified payroll submissions selected, we noted that the contractor or subcontractor had not submitted the weekly certified payroll in a timely manner. The contractor had submitted their certified payroll several weeks after the week of work performed. Cause: The City’s procedures did not include documenting the review of the certified payroll received. In addition, the City did not have the necessary internal controls in place to ensure the accuracy of the tracking of work weeks being performed as well as the contractor’s and subcontractor’s timely submittal of certified payroll. Effect: Ineffective controls over this area of compliance could result in noncompliance with the wage rate compliance requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Sampling was used. We selected sixty (60) out of all weeks indicated as work weeks for the City’s project for testing. However, due to the condition noted above, the population of work weeks could not be verified. Repeat Finding from the Prior Year(s): Yes, 2023-003. Recommendation: We recommend that the City strengthen its internal controls to ensure that timely reviews of certified payroll submissions are being performed by the City. This could include performing procedures to ensure that information being provided to the City by its consultant project managers is accurate and that the required certified payroll is being submitted by contractors and subcontractors in a timely manner. View of Responsible Official and Planned Corrective Actions The City concurs with the finding. See separate corrective action plan.
WIC Special Supplemental Nutrition Program for Women, Infants, and Children Assistance Listing No. 10.557 U.S. Department of Agriculture Criteria or Specific Requirement – Procurement (45 CFR 200.318-200.326) Condition - The Health System, prior to fiscal year 2025, did not have a comprehensive procurement policy that is in line with Uniform Guidance requirements. In addition, the Health System entered into various professional services contracts for marketing, advertising, and information dissemination that do not exceed the simplified acquisition threshold and are considered micro-purchases, but did not maintain appropriate documentation to document the price reasonableness based on research, experience, and purchase history to support its procurement decisions. Questioned Costs - None Context - We tested one out of a total of four contracts that were considered micro-purchases. The sample was not intended to be, and was not, a statistically valid sample. During our testing of procurement requirements, the two vendor contracts tested over the micro-purchase threshold did not have appropriate documentation to evidence the basis of vendor selection (documentation of the price reasonableness based on research, experience, and purchase history). Effect - Micro-purchases were made without appropriate documentation to comply with Uniform Guidance requirements. Cause - The Health System did not have a comprehensive procurement policy that is in line with Uniform Guidance requirements. Adequate supporting documentation on the procurements were not obtained or maintained within vendor files and vendor contracts do not contain the necessary contract provision and language required by the Uniform Guidance. Repeat Finding - Yes Recommendation - We recommend the Health System revisit controls over this compliance requirement to ensure that appropriate documentation is gathered and retained within its procurement files to support all Federally funded purchasing decisions. We also recommend the Organization perform a comprehensive review of its procurement policy and ensure that it is in compliance and in-line with the procurement requirements of the Uniform Guidance. Views of responsible officials and planned corrective actions – The Organization has developed and implemented a policy and checklist to maintain written documentation of vendor selection and procurement process, along with the review and approval process required under the Uniform Guidance requirements.
Procurement, Suspension and Debarment Criteria Procurement Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow specific procurement standards set out in 2 CFR sections 200.317 through 200.327, which includes documenting the procurement methods used for vendor selection. These procedures are designed to ensure fair competition, cost-effectiveness, and federal requirements. These procurement standards require, among other provisions, that 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 reliable contractors, and maintaining records to document the history of procurement. 2. Conduct all procurement transactions for the acquisition of property or services under a federal award in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320. 3. Use documented procurement procedures, consistent with the standards of 2 CFR 200.317 to 320. 2 CFR 200.320 enumerates below the different procurement methods that a non-federal entity should use: a) 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 $50,000. b) Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. c) 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)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b) (1); 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 four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” Suspension and Debarment 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. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov Home (click on Search Record, then click on Advanced Search-Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition During our audit, MARTA was unable to provide purchase order documentation or contract for eight samples that are above $500. Per current procurement policy, “Purchases of supplies, services, and equipment costing more than five hundred ($500) shall be made by purchase order, unless authorized by a signed contract or Mountain Transit Board Approval”. During our audit, MARTA was unable to provide supporting documentation to demonstrate that the required price or rate quotations for those purchases or contracts with contract amounts above $10,000 were obtained from an adequate number of qualified sources and maintained the documentation to support its conclusion. These were noted for two samples tested. The expenditure paid ranged from $10,000 to $36,000 in 2024. During our audit, MARTA was unable to provide supporting documentation to demonstrate that the process of verifying if vendors are not suspended or debarred was performed on two vendors tested. The expenditure paid to these vendors ranged from $109,000 to $647,000 in 2024. Cause MARTA did not follow its existing purchasing policy and procedures, and lack of procedures in maintaining appropriate records of vendor selection and compliance with procurement standards. Effect The absence of procurement documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances or unnecessary sanctions. Questioned Costs None Recommendation MARTA should strengthen its internal controls over procurement by ensuring that all procurement activities, particularly significant expenditures, are properly documented. This includes retaining evidence that procurement methods required by the Uniform Guidance were followed, such as bids, contracts, or justifications for sole-source vendors. MARTA should also conduct training for staff involved in procurement to ensure awareness and adherence to the policies. Regular internal audits may be implemented to verify compliance with procurement procedures. Views of Responsible Officials and Planned Corrective Action MARTA is in the process of updating the Procurement Policy. MARTA will ensure that updated policies and procedures will be implemented to address compliance and documentation requirements for small and micro-purchases, sole-source, and informal processes. The updated Procurement Policy will be brought to the October 2025 Board of Directors meeting for Board review or approval. Personnel responsible: Sandy Benson, General Manager Anticipated completion date: October 2025
Procurement, Suspension and Debarment Criteria Procurement Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow specific procurement standards set out in 2 CFR sections 200.317 through 200.327, which includes documenting the procurement methods used for vendor selection. These procedures are designed to ensure fair competition, cost-effectiveness, and federal requirements. These procurement standards require, among other provisions, that 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 reliable contractors, and maintaining records to document the history of procurement. 2. Conduct all procurement transactions for the acquisition of property or services under a federal award in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320. 3. Use documented procurement procedures, consistent with the standards of 2 CFR 200.317 to 320. 2 CFR 200.320 enumerates below the different procurement methods that a non-federal entity should use: a) 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 $50,000. b) Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. c) 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)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b) (1); 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 four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” Suspension and Debarment 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. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov Home (click on Search Record, then click on Advanced Search-Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition During our audit, MARTA was unable to provide purchase order documentation or contract for eight samples that are above $500. Per current procurement policy, “Purchases of supplies, services, and equipment costing more than five hundred ($500) shall be made by purchase order, unless authorized by a signed contract or Mountain Transit Board Approval”. During our audit, MARTA was unable to provide supporting documentation to demonstrate that the required price or rate quotations for those purchases or contracts with contract amounts above $10,000 were obtained from an adequate number of qualified sources and maintained the documentation to support its conclusion. These were noted for two samples tested. The expenditure paid ranged from $10,000 to $36,000 in 2024. During our audit, MARTA was unable to provide supporting documentation to demonstrate that the process of verifying if vendors are not suspended or debarred was performed on two vendors tested. The expenditure paid to these vendors ranged from $109,000 to $647,000 in 2024. Cause MARTA did not follow its existing purchasing policy and procedures, and lack of procedures in maintaining appropriate records of vendor selection and compliance with procurement standards. Effect The absence of procurement documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances or unnecessary sanctions. Questioned Costs None Recommendation MARTA should strengthen its internal controls over procurement by ensuring that all procurement activities, particularly significant expenditures, are properly documented. This includes retaining evidence that procurement methods required by the Uniform Guidance were followed, such as bids, contracts, or justifications for sole-source vendors. MARTA should also conduct training for staff involved in procurement to ensure awareness and adherence to the policies. Regular internal audits may be implemented to verify compliance with procurement procedures. Views of Responsible Officials and Planned Corrective Action MARTA is in the process of updating the Procurement Policy. MARTA will ensure that updated policies and procedures will be implemented to address compliance and documentation requirements for small and micro-purchases, sole-source, and informal processes. The updated Procurement Policy will be brought to the October 2025 Board of Directors meeting for Board review or approval. Personnel responsible: Sandy Benson, General Manager Anticipated completion date: October 2025
Procurement, Suspension and Debarment Criteria Procurement Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow specific procurement standards set out in 2 CFR sections 200.317 through 200.327, which includes documenting the procurement methods used for vendor selection. These procedures are designed to ensure fair competition, cost-effectiveness, and federal requirements. These procurement standards require, among other provisions, that 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 reliable contractors, and maintaining records to document the history of procurement. 2. Conduct all procurement transactions for the acquisition of property or services under a federal award in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320. 3. Use documented procurement procedures, consistent with the standards of 2 CFR 200.317 to 320. 2 CFR 200.320 enumerates below the different procurement methods that a non-federal entity should use: a) 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 $50,000. b) Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. c) 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)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b) (1); 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 four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” Suspension and Debarment 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. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov Home (click on Search Record, then click on Advanced Search-Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition During our audit, MARTA was unable to provide purchase order documentation or contract for eight samples that are above $500. Per current procurement policy, “Purchases of supplies, services, and equipment costing more than five hundred ($500) shall be made by purchase order, unless authorized by a signed contract or Mountain Transit Board Approval”. During our audit, MARTA was unable to provide supporting documentation to demonstrate that the required price or rate quotations for those purchases or contracts with contract amounts above $10,000 were obtained from an adequate number of qualified sources and maintained the documentation to support its conclusion. These were noted for two samples tested. The expenditure paid ranged from $10,000 to $36,000 in 2024. During our audit, MARTA was unable to provide supporting documentation to demonstrate that the process of verifying if vendors are not suspended or debarred was performed on two vendors tested. The expenditure paid to these vendors ranged from $109,000 to $647,000 in 2024. Cause MARTA did not follow its existing purchasing policy and procedures, and lack of procedures in maintaining appropriate records of vendor selection and compliance with procurement standards. Effect The absence of procurement documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances or unnecessary sanctions. Questioned Costs None Recommendation MARTA should strengthen its internal controls over procurement by ensuring that all procurement activities, particularly significant expenditures, are properly documented. This includes retaining evidence that procurement methods required by the Uniform Guidance were followed, such as bids, contracts, or justifications for sole-source vendors. MARTA should also conduct training for staff involved in procurement to ensure awareness and adherence to the policies. Regular internal audits may be implemented to verify compliance with procurement procedures. Views of Responsible Officials and Planned Corrective Action MARTA is in the process of updating the Procurement Policy. MARTA will ensure that updated policies and procedures will be implemented to address compliance and documentation requirements for small and micro-purchases, sole-source, and informal processes. The updated Procurement Policy will be brought to the October 2025 Board of Directors meeting for Board review or approval. Personnel responsible: Sandy Benson, General Manager Anticipated completion date: October 2025
2024 – 002 Federal Agency: U.S. Department of Justice Federal Program Title: Crime Victim Assistance Federal Assistance Listing Number: 16.575 Federal Award Identification Number and Year: 15POVC23GG00443ASSI-2024 Pass-Through Agency: Minnesota Office of Justice Programs Pass-Through Number(s): A-CVS-2024-AMS-077 Award Period: 10/01/2023 to 09/30/2025 Type of Finding: Significant Deficiency in Internal Control over Major Federal Programs and Other Matters Criteria or Specific Requirement: Nonfederal 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 have a written procurement policy in accordance with Uniform Guidance for a portion of the year. In addition, during our testing, we noted the Organization did not apply the proper procurement procedures for two vendors as they did not perform appropriate procedures nor retain adequate documentation in accordance with Uniform Guidance. Questioned Costs: Unknown Context: Two out of the two procurement selections did not have procurement procedures followed. Cause: Vendors were procured prior to the implementation of a formal procurement policy; therefore, proper documentation was not retained as of the procurement date. Effect: Potential effect of noncompliance with Uniform Guidance when procuring goods and services for expenditures over federal awards. Repeat Finding: This is a repeat finding. Recommendation: The Organization should continue to apply its current procurement policy to new and existing vendors to ensure proper documentation is retained in accordance with said procurement policy and SA UG. Views of Responsible Officials and Planned Corrective Actions: The Organization will apply its current procurement policy to new and existing vendors in order to comply with applicable procurement requirements.
Condition: The Organization’s written policies and procedures related to financial management and procurement do not meet the requirements of 2 CFR 200, Subpart D and Subpart E. Criteria: According to 2 CFR Section 200.302.b and 2 CFR Section 200.305 of the Uniform Guidance, the Organization is required to have a written financial management policy. Additionally, according to 2 CFR Section 200.317 – 200.326, the Organization is required to have a written procurement policy. Cause: The Organization was unaware of requirements regarding policies and procedures outlined in the Uniform Guidance. Effect: Written policies necessary for non-Federal entities receiving federal funds were not in place. Repeat Finding: Yes Questioned Costs: None reported Recommendation: We recommend that the Organization update their written policies and procedures that meet the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Views of Responsible Officials and Planned Corrective Action: We concur with the auditor’s finding and will update the Organization’s written policies and procedures for the Uniform Guidance requirements.
Condition: The Organization did not have documentation related to the suspension and debarment testing performed on vendors. Criteria: According to 2 CFR Section 200.318 and 2 CFR Section 200.326 of the Uniform Guidance, non-federal entities other than states must follow procurement standards when operating federal programs and the procurement procedures required depend on the amount of the transaction. Cause: The Organization was in the process of implementing the draft procurement policy as of June 30, 2024. The policy is properly designed and follows the Uniform Guidance. However, the policy was not implemented during the period under audit. Effect: There was an increased risk that the Organization was contracting and awarding contracts to suspended or debarred vendors.. Repeat Finding: No Questioned Costs: None reported Recommendation: We recommend that the Organization implement a process to perform suspension and debarment testing as required by their procurement policy, and that as part of this process they maintain adequate supporting documentation and records to document suspension and debarment and the procedures performed to comply with the applicable CFR sections. This could include the use of standard forms and templates for suspension and debarment testing. Views of Responsible Officials and Planned Corrective Action: We concur with the auditor’s finding and will develop an updated procurement policy that includes maintaining adequate supporting documentation and records regarding suspension and debarment procedures performed.
Condition: The Organization’s written policies and procedures related to financial management and procurement do not meet the requirements of 2 CFR 200, Subpart D and Subpart E. Criteria: According to 2 CFR Section 200.302.b and 2 CFR Section 200.305 of the Uniform Guidance, the Organization is required to have a written financial management policy. Additionally, according to 2 CFR Section 200.317 – 200.326, the Organization is required to have a written procurement policy. Cause: The Organization was unaware of requirements regarding policies and procedures outlined in the Uniform Guidance. Effect: Written policies necessary for non-Federal entities receiving federal funds were not in place. Repeat Finding: Yes Questioned Costs: None reported Recommendation: We recommend that the Organization update their written policies and procedures that meet the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Views of Responsible Officials and Planned Corrective Action: We concur with the auditor’s finding and will update the Organization’s written policies and procedures for the Uniform Guidance requirements.
Condition: The Organization did not have documentation related to the suspension and debarment testing performed on vendors. Criteria: According to 2 CFR Section 200.318 and 2 CFR Section 200.326 of the Uniform Guidance, non-federal entities other than states must follow procurement standards when operating federal programs and the procurement procedures required depend on the amount of the transaction. Cause: The Organization was in the process of implementing the draft procurement policy as of June 30, 2024. The policy is properly designed and follows the Uniform Guidance. However, the policy was not implemented during the period under audit. Effect: There was an increased risk that the Organization was contracting and awarding contracts to suspended or debarred vendors.. Repeat Finding: No Questioned Costs: None reported Recommendation: We recommend that the Organization implement a process to perform suspension and debarment testing as required by their procurement policy, and that as part of this process they maintain adequate supporting documentation and records to document suspension and debarment and the procedures performed to comply with the applicable CFR sections. This could include the use of standard forms and templates for suspension and debarment testing. Views of Responsible Officials and Planned Corrective Action: We concur with the auditor’s finding and will develop an updated procurement policy that includes maintaining adequate supporting documentation and records regarding suspension and debarment procedures performed.
2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR part 200 of the Uniform Guidance. 2 CFR §§ 200.318 through 200.326 of the Uniform Guidance outline procurement requirements for all non-payroll direct expenditures. Entities expending federal monies are required to follow Uniform Guidance procurement standards. 2 CFR 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, contractor selection or rejection, and the basis for the contract price. The School District considered the contracts with Educational Service Centers to be noncompetitive procurements; however, the School District was unable to provide documentation that they met the criteria established in 2 CFR 200.320(c) to be considered as such. Due to a lack of internal controls over federal procurement documentation, the District did not properly maintain required supporting documentation. Failure to follow federal procurement standards, may result in the misuse of public funds, loss of "low risk auditee" status, increased audit expenses, loss of future federal awards, findings for recovery or other audit adjustments. The School District should review and follow the established Procurement policy to ensure proper procurement procedures are followed and sufficiently documented.
2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR part 200 of the Uniform Guidance. 2 CFR §§ 200.318 through 200.326 of the Uniform Guidance outline procurement requirements for all non-payroll direct expenditures. Entities expending federal monies are required to follow Uniform Guidance procurement standards. 2 CFR 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, contractor selection or rejection, and the basis for the contract price. The School District considered the contracts with Educational Service Centers to be noncompetitive procurements; however, the School District was unable to provide documentation that they met the criteria established in 2 CFR 200.320(c) to be considered as such. Due to a lack of internal controls over federal procurement documentation, the District did not properly maintain required supporting documentation. Failure to follow federal procurement standards, may result in the misuse of public funds, loss of "low risk auditee" status, increased audit expenses, loss of future federal awards, findings for recovery or other audit adjustments. The School District should review and follow the established Procurement policy to ensure proper procurement procedures are followed and sufficiently documented.
2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR part 200 of the Uniform Guidance. 2 CFR §§ 200.318 through 200.326 of the Uniform Guidance outline procurement requirements for all non-payroll direct expenditures. Entities expending federal monies are required to follow Uniform Guidance procurement standards. 2 CFR 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, contractor selection or rejection, and the basis for the contract price. The School District considered the contracts with Educational Service Centers to be noncompetitive procurements; however, the School District was unable to provide documentation that they met the criteria established in 2 CFR 200.320(c) to be considered as such. Due to a lack of internal controls over federal procurement documentation, the District did not properly maintain required supporting documentation. Failure to follow federal procurement standards, may result in the misuse of public funds, loss of "low risk auditee" status, increased audit expenses, loss of future federal awards, findings for recovery or other audit adjustments. The School District should review and follow the established Procurement policy to ensure proper procurement procedures are followed and sufficiently documented.
2024-003 Wage Rate Compliance CFDA Title: Education Stabilization Fund CFDA Number: 84.425 Federal Award Number and Year: 2021 Federal Agency: U.S. Department of Education Pass-through Entity: Montana Office of Public Instruction Condition: The District did not comply with the wage rate compliance related to construction using Education Stabilization Fund (ESSER) Grant monies. Context: During the testing of significant claims for the ESSER major programs related to construction, we noted claims in which there should be contracts in place and that the wage rate requirements would apply. Criteria: Section 7007 construction funds, as well as any Section 7002 or 7003(b) funds spent for construction or minor remodeling, are subject to Wage Rate Requirements (20 USC 1232b). Compliance Requirement – 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). Non-federal 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 non-Federal 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). Effect: Noncompliance with the Wage Rate Requirement for construction paid for out of the ESSER Grants. Cause: The District was not aware of the requirement. Recommendation: The District should implement internal controls to determine the federal compliance requirements of all federal funds received. In addition, procedures should be implemented to ensure any federal funds received in which the Wage Rate Requirement is required the following are implemented: 1. Any construction vendor is by contract, and that contract includes the Prevailing Wage clauses for the contractors and subcontractors. 2. The weekly certified payrolls are submitted to the District.
2024-003 Wage Rate Compliance CFDA Title: Education Stabilization Fund CFDA Number: 84.425 Federal Award Number and Year: 2021 Federal Agency: U.S. Department of Education Pass-through Entity: Montana Office of Public Instruction Condition: The District did not comply with the wage rate compliance related to construction using Education Stabilization Fund (ESSER) Grant monies. Context: During the testing of significant claims for the ESSER major programs related to construction, we noted claims in which there should be contracts in place and that the wage rate requirements would apply. Criteria: Section 7007 construction funds, as well as any Section 7002 or 7003(b) funds spent for construction or minor remodeling, are subject to Wage Rate Requirements (20 USC 1232b). Compliance Requirement – 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). Non-federal 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 non-Federal 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). Effect: Noncompliance with the Wage Rate Requirement for construction paid for out of the ESSER Grants. Cause: The District was not aware of the requirement. Recommendation: The District should implement internal controls to determine the federal compliance requirements of all federal funds received. In addition, procedures should be implemented to ensure any federal funds received in which the Wage Rate Requirement is required the following are implemented: 1. Any construction vendor is by contract, and that contract includes the Prevailing Wage clauses for the contractors and subcontractors. 2. The weekly certified payrolls are submitted to the District.
2024-003 Wage Rate Compliance CFDA Title: Education Stabilization Fund CFDA Number: 84.425 Federal Award Number and Year: 2021 Federal Agency: U.S. Department of Education Pass-through Entity: Montana Office of Public Instruction Condition: The District did not comply with the wage rate compliance related to construction using Education Stabilization Fund (ESSER) Grant monies. Context: During the testing of significant claims for the ESSER major programs related to construction, we noted claims in which there should be contracts in place and that the wage rate requirements would apply. Criteria: Section 7007 construction funds, as well as any Section 7002 or 7003(b) funds spent for construction or minor remodeling, are subject to Wage Rate Requirements (20 USC 1232b). Compliance Requirement – 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). Non-federal 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 non-Federal 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). Effect: Noncompliance with the Wage Rate Requirement for construction paid for out of the ESSER Grants. Cause: The District was not aware of the requirement. Recommendation: The District should implement internal controls to determine the federal compliance requirements of all federal funds received. In addition, procedures should be implemented to ensure any federal funds received in which the Wage Rate Requirement is required the following are implemented: 1. Any construction vendor is by contract, and that contract includes the Prevailing Wage clauses for the contractors and subcontractors. 2. The weekly certified payrolls are submitted to the District.
2024-003 Wage Rate Compliance CFDA Title: Education Stabilization Fund CFDA Number: 84.425 Federal Award Number and Year: 2021 Federal Agency: U.S. Department of Education Pass-through Entity: Montana Office of Public Instruction Condition: The District did not comply with the wage rate compliance related to construction using Education Stabilization Fund (ESSER) Grant monies. Context: During the testing of significant claims for the ESSER major programs related to construction, we noted claims in which there should be contracts in place and that the wage rate requirements would apply. Criteria: Section 7007 construction funds, as well as any Section 7002 or 7003(b) funds spent for construction or minor remodeling, are subject to Wage Rate Requirements (20 USC 1232b). Compliance Requirement – 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). Non-federal 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 non-Federal 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). Effect: Noncompliance with the Wage Rate Requirement for construction paid for out of the ESSER Grants. Cause: The District was not aware of the requirement. Recommendation: The District should implement internal controls to determine the federal compliance requirements of all federal funds received. In addition, procedures should be implemented to ensure any federal funds received in which the Wage Rate Requirement is required the following are implemented: 1. Any construction vendor is by contract, and that contract includes the Prevailing Wage clauses for the contractors and subcontractors. 2. The weekly certified payrolls are submitted to the District.
Finding 2024-001 – COVID 19 – Coronavirus State and Local Fiscal Recovery Fund - AL No. 21.027 U.S. Department of Treasury Other Matters Related to Internal Control over Compliance of the Major Program 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 and Context: During our testing as it related to compliance with procurement we noted that an expense for engineering services for the Waste Water Treatment Assessment services charged to the major program would have required a formal bidding process as the project exceeded the simplified acquisition threshold. The Town had selected the engineering company for “On Call” engineering services as it related to the DPW through a request for qualifications process. The contract does include as part of the services to be provided Waste Water Treatment Assessment services. However, the contract is not specific to federally funded projects. The Town of Medfield had submitted the request for qualifications documentation as well as the executed contracted for “On Call” services to both the Town’s consulting service and the pass through entity for approval of the Waste Water Treatment Assessment. The pass through entity and the pass through entities Auditors did not have any concerns with the request for qualifications as it relates to the Waste Water Treatment Assessment project. Questioned Costs: $40,500 Cause: Based on the judgement of the pass through entity (Norfolk County) and their auditors, the Town was approved to procure engineering services for the Waste Water Treatment Assessment as part of a larger “On Call” services contract. The Town did select the contractor through a competitive request for qualifications process, but did not initiate a separate procurement for the sub-project. Effect or Potential Effect: There is risk that amounts charged to the federal awards major program may not be in accordance with procurement, suspension, and debarment principles. Identification as a Repeat Finding: N/A Recommendation: Going forward, the Town of Medfield should consider a separate bidding process for expenses related to federal grant funds. Management Response: Due to the differences in the interpretation of federal requirements regarding competitive procurement, the Town will follow the more restrictive one on an ongoing basis. New projects paid for by federal grants will have separate procurements.
2024-004 Procurement Federal Agency: All Federal Agencies - US Department of Transportation Federal Program Name: All Federal Programs Assistance Listing Number: All Assistance Listing Numbers - 20.205 Federal Award Identification Number and Year: N/A – applies to all Federal Programs Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matter Criteria: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The Town’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Effect: With the absence of a compliant policy, the Town is at risk for noncompliance as it relates to federal procurement. Cause: The Town was unaware that the policy was not compliant with Uniform Guidance. Repeat Finding: No Recommendation: We recommend that the Town review its formal procurement policies 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 agrees with this finding.
Finding No. 2024-004 Procurement Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRFP4547 – 2021 Award Period: 3/3/21 – 12/31/24 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: The Town must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Control: 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, selection of contract type, contractor selection or rejection, and the basis for the contract price. §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 of 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 the 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 micropurchases 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 higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the 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 noncompetitive 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. Condition: The Town purchasing policy does not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs: None Context: Although the Town’s purchasing policies do not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 7 of 7 procurement transactions tested. Cause: Management was not aware of the procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Effect: The Town is at risk for noncompliance with Federal grants as it relates to procurement. Repeat Finding: No Recommendation: We recommend that the Town update its procurement policies to include all elements identified in 2 CFR sections 200.303 and 200.318 through 200.326. Views of Responsible Officials: Management is working with our current auditors to update the Town’s procurement policies to be in compliance with the Uniform Guidance.
2024-001 PROCUREMENT, SUSPENSION AND DEBARMENT Grantor: U. S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds CFDA Number: 21.027 Pass-through Entities: CT Department of Social Services CT Department of Children and Families CT Office of Early Childhood CT Office of Victim Services Criteria: When procuring property and services, entities must follow the procurement standards set out at 2 CFR sections 200.318-200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The procurement policy in place during fiscal 2024 had not been updated to comply with the requirement of the Uniform Guidance as stated above, and did not specify a micro-purchase or small purchase threshold above which written quotes would be required. A formal written policy for ensuring vendors are not suspended or debarred was not included in the existing policy and therefore this process was not being executed in a consistent manner. Questioned Costs: None. Effect: Certain purchases could be incurred at higher amounts than might have been the case had multiple written quotes been obtained prior to the transaction. However, all purchases tested appeared to be in the normal course of business and costs appeared reasonable. Our testing did not result in any questioned costs. Additionally, the potential existed that a vendor that could either be suspended or debarred could have unknowingly been utilized due to the existing process. Cause: The agency did not timely complete the process to update its policies and procedures to conform with the Uniform Guidance by the expiration of the extended implementation deadline cited in the Uniform Guidance. A new policy was implemented subsequent to year-end. Recommendation: Additional training of relevant staff regarding the new policies and procedures should be considered, especially regarding retention of adequate documentation of bids, quotes, or other procedures including documentation of the checking of vendors against the suspension and debarment lists. Views of Responsible Officials: A new procurement policy, including a process to ensure vendors are not suspended or debarred, was prepared and implemented effective in January 2025. Relevant staff have been and continue to be trained appropriately regarding execution of related procedures to ensure all aspects are being properly performed.