Finding 1089653 (2024-002)

Finding 2024-002 Procurement and Suspension and Debarment – Significant Deficiency in Internal Controls Over Compliance Agency/Pass-through Grantor Department of Treasury Assistance Listing Numbers (ALN) and Program Name 21.027 – Coronavirus State & Local Fiscal Recovery Fund – COVID-19 Award Year 2024 Criteria or Specific Requirement The regulations in 2 CFR Part 180 prohibit contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal programs or activities. Procurement policies should be established to ensure documentation is retained to verify a check was done of the Governmentwide System for Award Management Exclusions – (SAM Exclusions) prior to awarding of contracts that will be funded with federal awards. Condition Procurement testing identified a total 3 out of 6 procurements where evidence was not retained to support the required verification of whether a contractor was a suspended or debarred. Cause The Borough’s policies over procurement and issuance of purchase orders or contracts were not designed appropriately to retain evidence of suspension and debarment review for all covered transactions funded with federal awards. Effect or Potential Effect Federal funds could be disbursed to suspended or debarred entities. Questioned costs Not Applicable Context For the Coronavirus State & Local Fiscal Recovery Fund, we tested 6 procurements, which represented 100% of the population. The open market purchase order population of 2 items totaled to $51,927, and the competitive bid contracts of 4 items totaled to $1,742,442. Procurement testing identified 2 open market purchase orders totaling $51,927 and 1 competitive bid contract totaling $71,730 for which the Borough did not retain evidence of verification of suspension and debarment review. BDO did not identify any suspended or disbarred vendors in the testing. Identification as a repeat finding Not a repeat finding.