Finding 1105648 (2024-002)

Finding No. 2024-002 Significant Deficiency: Procurement and Suspension and Debarment - Compliance and Control Finding ALN 21.027 - COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Federal Agency: US Department of Treasury Pass-Through Entity: Not Applicable Criteria or Specific Requirement: The regulations in 2 CFR Part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: Audit procedures revealed that for one contract tested, the vendor was not evaluated for suspension or debarment prior to allocating federal funds to the contract. Cause: The vendor did not include a suspension and debarment clause representing that the vendor is not suspended and debarred, and the City did not evaluate the vendor for suspension and debarment prior to allocating federal funds to the contract. Effect: Suspension and debarment provisions were not met for one of four contracts tested. Questioned Costs: Not Applicable. Context: Out of four contracts tested, one contract tested did not include a suspension and debarment clause representing that the vendor is not suspended or debarred and that the vendor was not evaluated for suspension or debarment prior to allocating federal funds to the contract. Identification as a repeat finding: This is a first time finding. Recommendation: We recommend that management include a suspension and debarment clause in all contracts which may get allocated to federal funding prior to allocating federal funds to the contract or perform alternative procedures to ensure vendor is not suspended or debarred. Views of Responsible Officials: See Corrective Action Plan.