Finding Text
Federal Agency: U.S. Department of Transportation
Federal Program Title: Formula Grants for Rural Area and Tribal Transit Program
AL Number: 20.509
Federal Award Identification Number and Year: MN-2021-036-01
Pass-Through Agency: Minnesota Department of Transportation
Pass-Through Number(s): 1051353
Award Period: 1/1/2023-12/31/2023
Type of Finding:
• Material Weakness in Internal Control over Compliance and Other Matters
Criteria or Specific Requirement: When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by
(1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/
(2) collecting a certification from the entity, or
(3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300).
Condition: During our testing we noted the Organization did not apply its suspension and debarment procedures for five contractors sampled as they did not perform nor retain adequate documentation in accordance with Uniform Guidance.
Questioned Costs: N/A
Context: Five out of the five selections did not have any suspension/debarment procedures followed until after entering into the covered transaction.
Cause: Management was aware of the suspension and debarment requirements dictated by the Uniform Guidance, however did not follow their policy.
Effect: Potential for the Organization to do business with entities that are suspended or debarred which is not allowed per Uniform Guidance.
Repeat Finding: This is not a repeat finding.
Recommendation: The Organization should ensure they follow their suspension and debarment policy. The Organization should ensure documents are retained to support whether suspension and debarment policies were followed for contractors in years past.