Finding Text
Significant deficiency in internal controls over compliance. Major Program: Coronavirus State and Local Fiscal Recovery Funds - 21.027. Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. "Covered transactions" include contracts for goods and services awarded under a non-procurement transaction (e.g. grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a passthrough entity, irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the Excluded Parties Listing System (EPLS) maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: The City does not have adequate internal control procedures in place to monitor compliance with suspension and debarment requirements for contracts. Cause: The City could not provide documentation to verify that it followed the appropriate suspension and debarment requirements. Effect: Payments of program funds to a contractor that has been suspended or debarred would be unallowable and subject to recovery by the grantor. We were able to verify that the vendors were not suspended or debarred or otherwise excluded from participating in the transaction. Repeat Finding: No. Recommendation: The City should update procedures to ensure that a vendor's status is checked in SAM.gov prior to contracting with a vendor. Additionally, the City should update contracts to include a suspension and debarment paragraph to verify status with every renewal or collecting certification from the proposed entity. Management's Response: The City will update procedures to ensure that a vendor's status is checked prior to contracting. The City will update contracts to include a suspension and debarment paragraph to verify the status with every renewal or will collect certification from the proposed entity.