Finding 1151122 (2024-002)

Finding 2024-002: Coronavirus State and Local Fiscal Recovery Funds – Suspension and Debarment Requirements Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Federal Agency: Department of the Treasury Pass-through Agencies: City of Pittsburgh and the Commonwealth of Pennsylvania, Department of Community and Economic Development Condition: During 2024, the URA did not follow the internal control procedures to ensure review that all covered contracts and subawards were not conducted with entities that are suspended and debarred. During our testing of procurement transactions subject to suspension and debarment requirements, we noted that the entity did not retain documentation demonstrating that it had reviewed the System for Award Management (SAM.gov) exclusion records prior to entering into contractual agreements. Specifically, there was no evidence that a SAM.gov printout was reviewed or approved to verify that vendors were not suspended or debarred at the time of contract execution. While the entity stated that such reviews are conducted, the lack of documented verification prevents confirmation that appropriate controls were consistently applied. In conjunction with the audit, we reviewed the SAM Exclusions for all transactions in our sample and we noted that no transactions were with entities that were suspended or debarred. Criteria: In accordance with 2 CFR Part 200.303, a non-Federal entity must establish and maintain effective internal control over Federal awards that provide reasonable assurance that the non-Federal entity manages the Federal award in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Cause: The URA did not followed internal control procedures to document the review of the SAM.gov exclusion list prior to contract execution. Effect: The lack of following internal control processes to review the verification of suspension and debarment prior to entering into contracts, agreements, and grants, could result in the URA entering into covered transactions with entities that are suspended and debarred which is not allowed under the requirements for the Coronavirus State and Local Fiscal Recovery Funds program. Questioned Costs: None Identification as a Repeat Finding: This is a repeat finding. Recommendation: The URA should follow the internal control procedure of reviewing the suspension and debarment verification prior to entering into contracts, agreements and grants. The review should be documented. Views of responsible officials and Planned Corrective Action: Management agrees with this finding; see separate Corrective Action Plan.