Finding 1075264 (2022-003)

2022-003 Suspension and Debarment Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLT 4867, 2022 Pass-Through Agency: N/A – Direct 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 transactions over $25,000. Entities must use their documented procurement process compliance. Condition: For one of two covered transactions tested, the verification for suspended or debarred vendors was not performed before entering into the covered transaction. Questioned Costs: None Context: The County entered into two covered transactions; both were tested for compliance with suspension and debarment requirements. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The County is not in compliance with federal regulations. Cause: The County has procedures in place to perform verification and retain documentation, but not all department heads are aware of the procedures or federal regulations. Recommendation: We recommend the County review its policies and communicate with management and staff their responsibility for complying with federal regulations and maintaining documentation to support that compliance. View of Responsible Official: Concur