Finding Text
Finding 2024-003 Internal Control Over Suspension and Debarment Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2021-075-00; CA-2023-202-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Prior to entering into subawards and contracts with award funds, recipients must ensure that contractors and subcontractors are not suspended from participating in federally funded projects. Verification is typically done by reviewing the System for Award Management (“SAM”) database and including certifications in contacts. Condition: During the audit, we noticed that the City did not perform suspension and debarment checks prior to awarding contracts. No evidence was available to show that vendors were verified against the System for Award Management (SAM) database or that suspension and debarment certifications were obtained. Cause: While the City adopted a suspension and debarment policy on April 2024, the policy was not in effect for a portion of the fiscal year and was not applied retroactively resulting in vendor verifications not being performed. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2023-005. Recommendation: We recommend the City ensure full implementation of its suspension and debarment policy adopted on April 2024, including applying verification procedures to all applicable federally funded contracts moving forward. Views of Responsible Officials: The City implemented a new review, tracking and documentation process for all procurements during FY 2023-24. Staff have been performing checks of all vendors -- regardless of the nature of the funding for the project – against SAM.GOV to check for disbarment. A PDF of the results for each vendor is saved in a project folder attached to each procurement. These files are stored on an internal network drive. Management feels the process in place addresses this finding.