Finding Text
2024-002: Procurement
Program: Coronavirus State and Local Fiscal Recovery Funds
CFDA No.: 21.027
Federal Grantor: U.S. Department of the Treasury
Passed-through: Montgomery County
Grant No.: MPRF-22-435, ACLAMO Expansion ARPA Grant
Type of Finding: Significant Deficiency in Internal Control
Condition: The organization’s procurement policies were not followed when selecting the major contractors for the expansion project. Specifically, there was no documentation maintained for federal compliance checks or the evaluation and ranking of candidates by the infrastructure committee.
Criteria: Under 2 CFR 200.318, non-federal entities are required to maintain documented procurement procedures that align with applicable federal, state, and local laws; this includes maintaining records that detail the history of procurement.
Cause: The organization does not have effective controls in place to ensure the procurement policies and procedures are followed.
Effect: Noncompliance with federal procurement standards could lead to questioned costs for expenditures under the Coronavirus State and Local Fiscal Recovery Funds program. It also increases the risk of noncompetitive practices and missed opportunities to engage small and disadvantaged businesses.
Questioned Costs: No questioned costs were identified as a result of our procedures.
Context/Sampling: A sample of 4 contractors was selected for testing of Procurement.
Repeat Finding from Prior Year: No.
Recommendation: The organization should provide training for staff involved in procurement to ensure they understand and follow the documented policies, conduct periodic reviews of procurement activities to verify compliance with the policies, and maintain documentation of the procurement activities.
Views of Responsible Officials and Planned Corrective Action: We agree with the auditors’ comments, and the following action will be taken to improve the situation. We have taken steps to strengthen compliance and oversight. We are committed to developing and implementing standardized procedures for documenting meetings and procurement-related decisions, in collaboration with a delegate from the Infrastructure Committee. These procedures are being led by ACLAMO and will involve a designated Construction Manager to monitor compliance with standardized procedures and reporting throughout the project, that meeting minutes are properly recorded by the grantor’s requirements, and that all activities are compliant with the grant and contract requirements. The Infrastructure Committee delegate’s role will be to ensure alignment and transparency. ACLAMO will provide mandatory training for all staff involved in the procurement process and will conduct a comprehensive review of its procurement policy to ensure alignment with Uniform Guidance.