Finding Text
2024-5 Suspension and Debarment Verification Criteria: In accordance with 2 CFR §200.214 and the specific compliance requirement for Suspension and Debarment, non-Federal entities are prohibited from contracting with or making covered transactions with parties that are suspended, debarred, or otherwise excluded from participation in Federal programs. To comply, entities must verify the status of vendors and contractors prior to entering into covered transactions by performing one of the following: 1. Checking the System for Award Management (SAM.gov) exclusion listings, 2. Collecting a certification from the vendor, or 3. Adding a clause or condition in the contract confirming that the vendor is not suspended or debarred. Adequate documentation of the verification process must be maintained. Condition: During our audit, we noted that the Borough does not verify whether contractors or vendors receiving Federal funds are suspended or debarred from doing business with the Federal government. The Borough also does not maintain documentation demonstrating that such checks were performed. Cause: The Borough was not aware of the specific requirement to verify and document vendor suspension and debarment status for transactions funded with Federal awards. Effect: Failure to verify suspension and debarment status increases the risk that the Borough could enter into contracts or make payments to parties that are ineligible to participate in Federal programs. This exposes the Borough to potential noncompliance with Federal regulations and could result in disallowed costs or repayment of Federal funds.Recommendation: We recommend that the Borough establish and implement procedures to verify and document that all vendors and contractors receiving Federal funds are not suspended or debarred prior to entering into covered transactions. Acceptable procedures include checking vendor status on the SAM.gov website and printing or saving verification documentation, or obtaining vendor certifications confirming compliance. This review should be documented and retained for audit purposes.