Finding 1102117 (2023-001)

2023-001 Suspension and Debarment Prior Year Finding Number: 2022-001 Year of Finding Origination: 2022 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter  Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP3269; 2021 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 County’s procurement policy requires verification that vendors are not suspended or debarred. Condition: For both covered transactions selected for testing, the County did not perform the verification for suspended or debarred vendors prior to entering into the covered transactions. Questioned Costs: None. Context: There were nine covered transactions during the year. In addition, neither of the vendors tested were listed as suspended or debarred on SAM.gov at the time of the audit. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded prior to entering into a covered transaction may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services under the grant. Cause: The County has procedures in place to perform verification and retain documentation, but not all employees are aware of the procedures or federal requirements. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the County; the County should complete this documentation prior to entering into a covered transaction. In addition, the County should consider providing additional training to employees to ensure staff are aware of federal requirements and County procedures. View of Responsible Official: Concur