Finding Text
United States Department of the Treasury Reference Number: 2023-012 Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Federal Award Number: None Assigned Type of Finding: Noncompliance and Significant Deficiency in Internal Controls over Compliance Compliance Requirement: Procurement Condition: During our audit of procurement transactions related to the SLFRF, we noted one instance where the Town acquired precast restrooms at a cost of $339,500, for a park project without a competitive bidding process, as required by federal regulations and the Town’s Purchasing Policy. Criteria: Under 2 CFR §200.318-§200.326, non-federal entities must follow documented procurement procedures that reflect applicable state, local, and tribal laws and regulations, provided those procedures conform to federal standards. The Town has adopted procurement policies requiring competitive bidding for purchases of equipment, materials, or professional services, with an estimated total cost exceeding $25,000 for an individual item/service or an overall contract exceeding $50,000. The policy also requires the documentation of vendor selection and justification. Cause: The Town did not consistently enforce its procurement policies due to turnover in key positions during the year. Effect: The Town was not in compliance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) at 2 CFR §200.318-§200.326 and with its own procurement policies. The lack of competitive bidding for purchases, where it is required increases the risk that the Town may not receive the best prices or terms for the goods and services it purchases. Recommendation: We recommend that the Finance Department enhance its processes and oversight surrounding federal and Town procurement requirements. Views of Responsible Town Officials and Planned Corrective Actions: See corrective action plan. Responsible Positions: Town Manager and Director of Finance