Finding Text
Federal Program: Coronavirus State and Local Fiscal Recovery Funds (21.027). Criteria: According to 2 CFR Section 180.300, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity is not suspended, cebarred, or otherwise excluded. Condition: The City had transactions in excess of $25,000 with five vendors in which they did not verify that the entities were not suspended, debarred, or otherwise excluded. Cause: The City had inadequate oversight of this requirement. Effect: The City was at risk of making material payments to a vendor who is not allowed to do business with the federal government. There was no noncompliance, but there was inadequate internal control in place to prevent noncompliance. Questioned Costs: None. Context: Payments to five vendors totaled $2,731,850. Total payments from the program totaled $3,191,067. As noted above, there was no noncompliance, but there was not internal controls in place to ensure noncompliance. Repeat Finding: Yes. Recommendation: We recommend the City Check the excluded parties list system or collect certifications from the entity for any vendor in which the City expects to spend more than $25,000 of federal grant funds for the year. Views of Responsible Officials and Planned Corrective Actions: We will ensure we comply going forward.