Finding Text
Federal Agency: U.S. Department of Transportation
Federal Program Name: Formula Grants for Rural Areas and Tribal Transit Program
Assistance Listing Number: 20.509
Federal Award Identification Number and Year: 2024; FAIN not available.
Pass-Through Agency: State of Vermont Agency of Transportation
Pass-Through Number(s):
EA#COVIDFTA-934 EA#FT202201-704 EA#FT24FLEX-454
EA#CRRSAA22-934 EA#FT23FLEX-064 EA#FT24FLEX-554
EA#FT201806-454 EA#FT23FLEX-454 EA#FT24FLEX-854
EA#FT201806-554 EA#FT23FLEX-554 EA#FT24FLEX-954
EA#FT201806-954 EA#FT23FLEX-954 EA#FT24FORM-454
EA#FT201903-704 EA#FT23FORM-064 EA#FT24FORM-924
EA#FT202104-704 EA#FT23FORM-934 EA#FT24FORM-934
EA#FT202104-954 EA#FT24FLEX-064
Award Period: July 1, 2023 through June 30, 2024
Compliance Requirement: Procurement, Suspension and Debarment
Type of Finding: Material weakness in internal control over compliance and material noncompliance (modified opinion)
Criteria or specific requirement: The United States Code of Federal Regulations (CFR) Title 2, Part 200.319 indicates procurement transactions under the Federal award must be conducted in a manner that provides full and open competition. Additionally, 2 CFR Part 200.320 indicates that for any allowable method chosen, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the requirements of 2 CFR Part 200, Subpart D. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR Part 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), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR Part 180.300). 2 CFR Part 200.303 indicates that non-Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition: For a sample of five (5) procurement transactions above the micro-purchase threshold, documentation was not maintained to support the procurement, suspension and debarment procedures performed in order to demonstrate compliance with 2 CFR Part 180 and 2 CFR Part 200.
Questioned costs: Unknown.
Context: Five of five transactions selected for testing in our sample.
Cause: Procedures were not designed or implemented to maintain documentation to support compliance with the standards of procurement, suspension and debarment contained in 2 CFR Part 180 and 2 CFR Part 200.
Effect: Compliance with the requirements of the federal award could not be demonstrated. Additionally, the lack of internal controls presents additional risk of noncompliance in circumstances where federal expenditures are made to ineligible entities.
Repeat Finding: No.
Recommendation: We recommend management enhance procedures and controls to ensure documentation is maintained to support all procurements and suspension and debarment verifications related to expenditures from federal award programs. Justification for noncompetitive procurements (i.e., sole source, public exigency, or consent of the awarding agency), should also be documented. Such documentation should be consolidated and maintained in a secure, accessible location.
Views of responsible officials: Management agrees with the finding.