Finding 1148123 (2023-003)

FINDING 2023-003 Information on the federal program: Federal Agency: Department of the Treasury Pass-Through Entity: N/A – Direct Grant Federal Program: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Compliance Requirement: Procurement – Suspension and Debarment Audit Findings: Significant Deficiency, Noncompliance Criteria: 2 CFR 180.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: a) Checking the SAM Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person.” Condition: The City of Bloomington could not provide documentation to support that vendors procured under CSLFRF funding were not suspended or debarred. Cause: The City had not developed a system of internal controls that would have ensured compliance with Procurement and Suspension and Debarment compliance requirements for covered transactions. Effect: The failure to establish internal controls could have enabled noncompliance to go undetected. If vendors would have been suspended or debarred, the failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the City. Questioned costs: There are no questioned costs. Context: In a sample of five vendors with aggregate disbursements for FY2023 above the $25,000 covered transaction threshold, Crowe noted for each selection that the City had not completed a check for suspension and debarment nor had had they obtained a contract clause from the vendor/service provider certifying that they were not suspended and/or debarred. Identification as a repeat finding, if applicable: Yes, finding 2022-004 in the prior year report. Recommendation: We recommend that the City establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include ensuring suspension and debarment checks are performed and documented prior to entering into the transaction. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.