Finding Text
2023-003 SUSPENSION AND DEBARMENT
U.S. Department of Environmental Protection
ALN 66.456 – National Estuary Program
Federal Award ID Number: 4T-02D39922 and CE-00D90119
2023 Funding
Criteria: 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal controls. Pursuant to 2 CFR section 180.300, the Council may not contract with or make subawards to parties that are identified as being suspended or debarred by the Federal Government. The Council must verify the parties’ eligibility to receive payment from a program funded by a Federal grant prior to entering a covered transaction (as defined in 2 CFR section 180.220).
Condition: The Council did not have a process in place to verify that subrecipients and vendors for covered transactions were not suspended or debarred.
Cause: Management was not aware of this procurement requirement.
Effect: The Council could inadvertently enter a covered transaction with a suspended or debarred party, resulting in the disallowance of payments made to that party as eligible costs under the Federal program.
Questioned Costs: None.
Perspective: Many of the subawards made by the Council were to other local governments or universities, which are entities unlikely to be suspended or debarred. As part of our compliance testing, we tested a sample of subrecipients and vendors for suspension and debarment, noting no exceptions.
Recommendation: We recommend the Council implement controls to ensure the Council does not enter a subaward or other covered transaction with a party that is suspended, debarred or otherwise excluded from participating in federal awards. We suggest the Council include a clause in the subrecipient contracts stating the contractor is not suspended or debarred. This clause would need to be included in any modifications to the contracts that provide for additional funding. For other covered transactions, the Council should document their verification of the vendor’s status on the System for Award Management (SAM) Exclusions website.