Finding Text
31 C.F.R. § 19.200 identifies “covered transactions” as nonprocurement or procurement transactions at the primary tier, between a Federal agency and a person; or at the lower tier, between a participant in a covered transaction and another person. 31 C.F.R. § 19.210 provides that all nonprocurement transactions, as defined in § 19.970 are covered transactions unless listed in § 19.215. 31 C.F.R. § 19.220(b) provides, in part, that a contract for goods or services is a covered transaction if the contract is awarded by a participant in a nonprocurement transaction that is covered under § 19.210, and the amount of the contract is expected to equal or exceed $25,000. 31 C.F.R. § 19.300 provides that when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) checking the EPLS; or (b) collecting a certification from that person if allowed by this rule; or (c) adding a clause or condition to the covered transaction with that person.
The County did not have the proper internal controls in place to verify that all entities, with whom the County had entered into covered transactions, had not been suspended or debarred. During testing of procurement for the State and Local Fiscal Recovery Fund, Assistance Listing #21.027, we noted one instance where the County had a payment to a vendor of more than $25,000 and there was no evidence the County checked the EPLS, collected a certification from the entity, or added a clause or condition to the covered transaction with the vendor. Due to the deficient internal control structure, the required verification was not completed for one of the three contracts tested with covered transaction in the State and Local Fiscal Recovery Fund during Fiscal Year 2023.
Failing to implement appropriate controls may result in vendors receiving federal funds that are suspended or debarred.
Prior to contracting with vendors that will be paid with federal funds, the County should verify the vendor is not suspended or debarred by checking the EPLS, collecting a certification from the vendor, or adding a clause or condition to the covered transaction with the vendor.