Finding Text
2024-003: Suspension and Debarment Verification Assistance Listing Number (ALN) and Title: 20.205 Highway Planning and Construction Federal Grantor: U.S. Department of Transportation (DOT) Passed-through: Oregon Department of Transportation (ODOT) Award Identification Numbers and Years: Finding is applicable to all 20.205 awards on the SEFA for 2024 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control over Compliance Prior Year Audit Finding: No Criteria: 2 CFR 200.214 prohibits non-federal entities from contracting with or making subawards to parties listed on the governmentwide suspension and debarment list. 2 CFR 200.318(h) requires non-federal entities to verify that vendors are not suspended or debarred before entering into covered transactions (e.g., procurements expected to equal or exceed $25,000). This verification is typically done by checking the System for Award Management (SAM.gov) or collecting a certification from the entity. Prudent practice and effective internal control require documentation of these verification procedures and results. Condition: LCOG did not maintain documentation to demonstrate that it verified whether certain vendors paid with ALN 20.205 funds were excluded or disqualified under the suspension and debarment rules. While management stated they performed reviews of the SAM.gov listing prior to expenditure, no evidence (such as dated screenshots, search results printouts, or certifications) was available to support that the required verifications were performed for tested vendors. Questioned Costs: None. Context: During compliance testing for ALN 20.205, we selected a sample of two covered transactions. No other covered transactions were procured during FY 2024. LCOG could not provide documentation of its verification process for one the vendors in these transactions. Subsequent review of SAM.gov performed during the audit did not indicate the vendor had been suspended or debarred. Cause: LCOG has not implemented formal procedures requiring the retention of documentation demonstrating suspension and debarment checks for vendors paid with federal funds. Effect: Without documented verification, LCOG cannot demonstrate compliance with federal suspension and debarment requirements. While no ineligible vendors were identified in our sample, the lack of documented procedures and evidence represents a failure in the design or operation of internal controls, increasing the risk that LCOG could inadvertently contract with a suspended or debarred party using federal funds in the future. Recommendation: We recommend LCOG establish and implement formal, documented procedures for verifying that vendors are not suspended or debarred before entering into covered transactions paid with federal funds. These procedures should specify the method of verification (e.g., checking SAM.gov) and require retention of evidence (e.g., dated printouts or screenshots of the search results) within the procurement or vendor files. Auditee Views: The suspension and debarment check during the procurement process is one of the steps completed by the Procurement Officer for any covered transaction that is not the subject of a formal procurement. The Executive Director completed this check. For the one vendor referenced above, a sole source contract was to be awarded and the check for suspension and debarment of the vendor was completed by reviewing entity records in SAM.gov. The review of SAM.gov records did not disclose any suspensions or debarments of the vendor. In the future, we will take a screen shot of the result and place it in the procurement file. This will become part of the process immediately for any procurements that are not formal RFPs. Formal RFPs require vendors to certify that they are not suspended or debarred.