Finding Text
2023-010 U.S. Department of Treasury, For the Period July 1, 2022 through June 30, 2023, Assistance Listing #21.027 Coronavirus State and Local Fiscal Recovery Funds
Criteria: In accordance with 2 CFR 180 OMB Guidelines to Agencies on Government-Wide Debarment and Suspension, non-Federal entities are prohibited from contracting with parties that are suspended or debarred when a covered transaction is expected to equal or exceed $25,000 or meet certain other criteria specified in 2 CFR 180.220. The non-Federal entity must verify the contractor is not suspended or debarred by (1) checking the System for Award Management (SAM) exclusions maintained by the General Services Administration at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the contract with that entity.
Condition: During our testing of grant expenditures, we found no evidence the City verified the contractor was not suspended or debarred prior to entering into covered transactions.
Cause: The City did not have a procedure in place to ensure compliance with suspension and debarment requirements prior to contracting with a vendor.
Effect: The vendor could have been suspended or debarred from entering into a contract funded by Federal grants. Noncompliance can result in the grantor withholding Federal funds for the program.
Recommendation: We recommend management review the requirements under 2 CFR part 180 and develop procedures to add to their procurement ordinance to ensure one of the three verifications is present prior to entering into a covered transaction under a Federal grant award.
Known Questioned Costs: None
Likely Questioned Costs: None