Finding Text
Finding 2024-003: Significant Deficiency - Internal Control Over Procurement, Suspension and
Debarment
Program Water and Waste Disposal Systems for Rural Communities
Federal Agency U.S. Department of Agriculture
Assistance Listing Number 10.760
Repeat of Prior Year Finding 2023-003
Criteria: For federal awards after January 1, 2018, guidance provided in 2 CFR part 200.318 requires
nonfederal entities to establish and follow their own documented procurement procedures that
conform to applicable federal law and standards. 2 CFR part 200.320 includes different allowable
methods of procurement. There are also requirements to verify the vendors are not suspended or
debarred.
Condition/Context: During our testing for this program in the prior year, we noted that the City did not
have a written procurement policy to conform with Uniform Guidance requirements. The City
contracted with a third-party administrator who provided the services related to procurement for this
grant program. No additional contracts were procured with federal funds in 2024.
Cause: The City was made aware of the requirement of requiring a procurement policy but has not
implemented a policy at this time.
Effect: Without an adequate policy in place, procurement procedures may not adhere to requirements
of federal awards.
Questioned Costs: None noted.
Recommendation: Program personnel should become familiar with the procurement, suspension and
debarment rules for Federal programs and implement a formal written policy to conform with Uniform
Guidance requirements.
Views of Responsible Officials: Management agrees with the finding and will make efforts to
implement a formal procurement policy.