FAC Explorer

Finding 1062585 (2023-002)

Significant Deficiency
Requirement
I
Questioned Costs
-
Year
2023
Accepted
2024-09-09
Audit: 318791
Organization: City of Minneapolis (MN)
Auditor: Minnesota Office of the State Auditor

AI Summary

  • Core Issue: A contract for a project did not include necessary clauses for suspension and debarment or Buy America preferences, violating federal regulations.
  • Impacted Requirements: The City failed to verify vendor eligibility and did not adhere to Title 2 U.S. Code of Federal Regulations § 180.300 and section 70914 of the Build America, Buy America Act.
  • Recommended Follow-Up: The City should update policies and ensure contract managers understand their compliance responsibilities and maintain proper documentation.

Finding Text

2023-002 Suspension and Debarment and Build America, Buy America Act Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Transportation Program: 20.205 Highway Planning and Construction 20.205 COVID-19 - Highway Planning and Construction Award Number and Year: Not provided, 2023 Pass-Through Agency: Minnesota Department of Transportation Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000. The City’s procurement policy requires a suspension and debarment clause be included in the contract and also requires the contract manager to verify the vendor is not suspended, debarred, or otherwise excluded at SAM.gov. Additionally, section 70914 of the Build America, Buy America Act (BABA), requires a Buy America preference be included in the terms and conditions of each award with an infrastructure project. Condition: The contract in one of four projects tested did not include the suspension and debarment clause or the BABA preference. In addition, the City did not verify suspension and debarment before entering into the contract. Questioned Costs: None. Context: Four of eight contracts were tested for compliance with applicable federal regulations. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded may result in the City entering into a transaction with a vendor that is not authorized to provide goods and services. Also, failure to include the BABA requirements in the contract may result in construction materials used in the project not complying with the requirement of the BABA. Cause: Federal requirements were not followed as the project was initially planned without the use of federal funds. Recommendation: We recommend the City review its written policies and procedures and communicate with contract managers/administrators their responsibility for complying with the federal regulations and maintaining documentation to support that compliance. View of Responsible Official: Concur

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 486139 2023-001
    Significant Deficiency
  • 486140 2023-001
    Significant Deficiency
  • 486141 2023-002
    Significant Deficiency
  • 486142 2023-002
    Significant Deficiency
  • 486143 2023-002
    Significant Deficiency
  • 486144 2023-003
    Significant Deficiency
  • 486145 2023-003
    Significant Deficiency
  • 486146 2023-003
    Significant Deficiency
  • 1062581 2023-001
    Significant Deficiency
  • 1062582 2023-001
    Significant Deficiency
  • 1062583 2023-002
    Significant Deficiency
  • 1062584 2023-002
    Significant Deficiency
  • 1062586 2023-003
    Significant Deficiency
  • 1062587 2023-003
    Significant Deficiency
  • 1062588 2023-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.218 Community Development Block Grants/entitlement Grants $14.82M
20.205 Highway Planning and Construction $12.24M
14.239 Home Investment Partnerships Program $2.40M
14.241 Housing Opportunities for Persons with Aids $2.02M
66.468 Drinking Water State Revolving Funds $1.99M
14.900 Lead Hazard Reduction Grant Program $1.77M
20.205 Covid-19 - Highway Planning and Construction $1.29M
93.870 Maternal, Infant and Early Childhood Home Visiting Grant $1.16M
93.994 Maternal and Child Health Services Block Grant to the States $854,367
97.083 Staffing for Adequate Fire and Emergency Response (safer) $808,861
16.838 Comprehensive Opioid, Stimulant, and Other Substances Use Program $657,398
14.231 Emergency Solutions Grant Program $646,893
93.738 Pphf: Racial and Ethnic Approaches to Community Health Program Financed Solely by Public Prevention and Health Funds $612,394
21.023 Covid-19 - Emergency Rental Assistance Program $493,662
14.218 Covid-19 - Community Development Block Grants/entitlement Grants $439,106
97.067 Homeland Security Grant Program $435,105
16.833 National Sexual Assault Kit Initiative $434,845
93.354 Covid-19 - Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $417,102
17.277 Wioa National Dislocated Worker Grants/wia National Emergency Grants $383,191
93.738 Covid-19 - Pphf: Racial and Ethnic Approaches to Community Health Program Financed Solely by Public Prevention and Health Funds $351,258
93.069 Public Health Emergency Preparedness $328,682
14.913 Healthy Homes Production Program $325,060
93.435 The Innovative Cardiovascular Health Program $313,179
93.137 Covid-19 - Community Programs to Improve Minority Health Grant Program $299,132
17.259 Wioa Youth Activities $283,637
93.967 Centers for Disease Control and Prevention Collaboration with Academia to Strengthen Public Health $254,496
93.297 Teenage Pregnancy Prevention Program $251,447
93.136 Injury Prevention and Control Research and State and Community Based Programs $188,680
93.304 Racial and Ethnic Approaches to Community Health $158,862
17.258 Wioa Adult Program $156,088
45.024 Promotion of the Arts_grants to Organizations and Individuals $150,000
93.092 Affordable Care Act (aca) Personal Responsibility Education Program $96,279
66.034 Surveys, Studies, Research, Investigations, Demonstrations, and Special Purpose Activities Relating to the Clean Air Act $93,490
93.391 Covid-19 - Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $61,250
93.323 Covid-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $60,939
93.558 Temporary Assistance for Needy Families $59,640
14.231 Covid-19 - Emergency Solutions Grant Program $45,106
17.278 Wioa Dislocated Worker Formula Grants $41,625
97.044 Covid-19 - Assistance to Firefighters Grant $39,159
93.788 Opioid Str $37,257
66.312 Environmental Justice Government to Government (ejg2g) Program $36,666
93.421 Covid-19 - Strengthening Public Health Systems and Services Through National Partnerships to Improve and Protect the Nation’s Health $36,608
93.421 Strengthening Public Health Systems and Services Through National Partnerships to Improve and Protect the Nation’s Health $35,550
15.904 Historic Preservation Fund Grants-in-Aid $30,000
16.738 Edward Byrne Memorial Justice Assistance Grant Program $25,843
14.241 Covid-19 - Housing Opportunities for Persons with Aids $21,068
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $15,894
20.941 Strengthening Mobility and Revolutionizing Transportation (smart) Grants Program $9,000
16.710 Public Safety Partnership and Community Policing Grants $7,208
21.027 Covid-19 - Coronavirus State and Local Fiscal Recovery Funds $6,044