Finding Text
Identification of the Federal Program - Coronavirus State and Local Fiscal Recovery Funds - Assistance
Listing Number 21.027.
Criteria - According to 2 CFR 200.318, recipients under a Federal award or subaward must maintain and
use documented procedures for procurement transactions. These procedures must ensure full and open
competition, proper oversight, and compliance with applicable regulations.
The City’s procurement policy requires that all contracts exceeding $15,000 be subjected to competitive
bidding and approved by the City Council before execution. This requirement ensures transparency,
accountability, and proper oversight of public funds.
Furthermore, the Code of Alabama § 11-43C-28 (2023) states that a record of the proceedings of every
meeting of the council shall be kept, and every resolution or ordinance passed by the council must be
recorded, and the record of the proceedings of the meeting shall, when approved by the council, be signed
by the president of the council and the City Clerk.
Condition - During the audit, a contract in the amount of $1,338,870 was identified that had undergone
competitive bidding; however, there was no documentation in the City Council meeting minutes indicating
that the contract had been approved by the City Council. It is unclear whether the City Council approved
the contract, or if the approval was not properly documented.
Cause - The is a lack of procedural oversight and inadequate documentation practices.
Effect - Failure to obtain and/or document City Council approval for contracts over $15,000 increases the
risk of unauthorized expenditures, potential noncompliance with procurement policies, and reduced
transparency in financial decision making. This could also undermine public trust and limit oversight of
municipal contracts. Additionally, noncompliance with 2 CFR 200.318 could place federal funding at risk
or result in audit findings that require corrective action. Failure to follow record-keeping guidelines outlined
in the Code of Alabama § 11-43C-28 (2023) further weakens transparency and accountability in municipal
governance.
Recommendation - The City should ensure that all contracts exceeding $15,000 are formally approved by
the City Council and that such approvals are properly documented in the official meeting minutes.
Additionally, the City should implement stronger controls to verify and maintain documentation of contract
approvals to ensure compliance with both local procurement policies and federal regulations under 2 CFR
200.318. The City should also adhere to Code of Alabama § 11-43C-28 (2023) by maintaining complete
and accurate records of City Council proceedings, including approvals of contracts, to promote
transparency and accountability.