Finding Text
Major Federal Program – Economic Development Initiative, Community Project Funding, and Miscellaneous Grants; COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Compliance Requirements: Procurement, Suspension and Debarment Criteria: In accordance with the grant agreement and Uniform Guidance, effective internal controls must be in place to prevent and detect noncompliance. This requirement extends to ensuring procurement of vendors for costs to be requested under federal grants is done under allowable methods. Condition: (X) Compliance Finding (X) Significant Deficiency ( ) Material Weakness Context/Cause: Grant agreements and federal procurement requirements were not reviewed in enough detail to assess appropriateness of procurement of vendors under federal contracts. -COVID-19 - Coronavirus State and Local Fiscal Recovery Funds: Of the three vendors reviewed for appropriate procurement during testing, one vendor had not gone through the appropriate procurement process for purchases over the micro-purchase threshold. -Economic Development Initiative, Community Project Funding, and Miscellaneous Grants: Of the three vendors reviewed for appropriate procurement during testing, one vendor had not gone through the appropriate procurement process for purchases above the simplified acquisition threshold, including bidding. Effect and Questioned Costs: The absence of detailed review of procurement requirements related to federal grants increases the risk that misstatements due to error or fraud may occur and not be detected timely. Costs paid to these vendors that did not go through the appropriate procurement process are as follows: - COVID-19 - Coronavirus State and Local Fiscal Recovery Funds: $61,547 - Economic Development Initiative, Community Project Funding, and Miscellaneous Grants: $359,675 Other likely questioned costs are indeterminable. Recommendation: Management should reinforce the internal controls in place to ensure all vendors utilized for projects and agreements funded by federal grants are procured in accordance with federal guidelines. Responsible Official’s Response: See Corrective Action Plan