Finding 1151116 (2024-003)

U.S. Department of Treasury Passed through State of South Dakota Board of Water and Natural Resources Federal Financial Assistance Listing 21.027 Federal Award Number SLFRP5319 Federal Award Year 2021 Coronavirus State and Local Fiscal Recovery Funds Procurement Material Weakness in Internal Control over Compliance and Noncompliance Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327, which include having documented procedures for procurement transactions and written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. Condition: The City does not have a formal documented procurement policy which includes written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts with federal funds. Cause: The City has not formalized their practiced procurement policy and conflict of interest standards into a formal written document. Effect: This condition increases the risk of that federal procurement requirements and conflict of interest standards are not adequately communicated to and understood by employees engaged in the selection, award, and administration of contracts, which increases the risk of procurements under federal awards being made not in compliance with federal regulations or other procurement requirements specific to an award. Context/Sampling: No sampling used. Repeat Finding from Prior Year(s): No Recommendation: We recommend management formally document their procurement policy, ensuring that all required procurement standards within 2 CFR sections 200.318 through 200.327 are addressed. Views of Responsible Officials: Management agrees with the finding.