Finding 1088865 (2024-002)

2024 - 002 - PROCUREMENT AND SUSPENSION AND DEBARMENT Federal Transit Administration Formula Grants Assistance Listing No. 20.507 U.S. Department of Transportation Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred or whose principals are suspended or debarred. Covered transactions include procurement contracts for goods or services that are expected to equal or exceed $25,000 and all non-procurement transactions (e.g., subawards to subrecipients).Condition and Context We performed testwork on 40 vendors and noted that for two out of 40 vendors tested, the two vendors were not listed in SAM, there was not a signed statement/contract/certification that the had not been suspended or disbarred, and there was no evidence in the files that a review had been performed to verify that the vendors or the vendors’ principals had not been suspended or debarred. Upon discussion with MTA, they noted that they do include standard Suspension and Debarment language at the end of all purchase orders. However, there was no evidence that the vendor signed any statement/contract/certification that the vendors has not been suspended or debarred. Questioned Costs The costs associated with the two items selected for testing were $30,372 under grant TN-2022- 025-00 and $30,798 under grant TN-2023-028-00. Both were related to vehicle purchases. Therefore, the total questioned cost for fiscal year 2024 totaled $61,170. Cause The amounts paid to the vendors in question were related to vehicle purchases without verifying that the vendors or the vendors’ principals had not been suspended or debarred. Effect MTA may have entered into an agreement with a vendor that has been suspended or debarred. Recommendation We recommend that MTA ensure compliance with this regulation as it relates to federal programs for all vendors and should ensure that all vendors are listed in SAM, include a requirement that signed suspension and debarment certifications be obtained and placed in all contract files, or add a clause or condition to signed contracts or subcontracts between each vendor and MTA stating that the vendor or the vendors’ principals have not been suspended or debarred for all vendors regardless of the type of goods or services provided. Views of Responsible Officials and Planned Corrective Actions See management’s corrective action plan.