Finding 1146106 (2023-003)

U.S. Department of the Treasury Passed through the Nevada Housing Division, City of Reno COVID‐19: Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing #21.027 Procurement, Suspension and Debarment Significant Deficiency in Internal Control Over Compliance Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Non-Federal entities are prohibited from contracting with parties that are suspended or debarred under covered transactions. Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Procedures were not followed to verify if an entity was suspended or debarred before entering into a covered transaction. Cause: The Foundation did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable provisions or to ensure procedures were followed to verify an entity was not suspended or debarred prior to entering into a covered transaction. Effect: Contractors may not be aware of required terms and conditions. A covered transaction may be entered into with an entity that is suspended or debarred. Questioned Costs: None noted. Context/sampling: A nonstatistical sample of 10 procurement transactions out of a population of 64 was selected for testing, including 1 contract subject to Appendix II to Part 200. One vendor contract selected did not contain the applicable provisions required by Appendix II to Part 200 and another was missing procedures to verify the vendor was not suspended or debarred. Report Finding from Prior Year(s): No Recommendation: We recommend the Foundation enhance internal controls to ensure all contracts under federal awards contain the applicable contract provisions and to ensure procedures are followed to verify an entity was not suspended or debarred prior to entering into a covered transaction. Views of Responsible Officials: The Foundation agrees with this finding; see corrective action plan.