Finding Text
2025-001 – Suspension and Debarment Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance (Suspension and Debarment). Federal program(s) U.S. Department of Agriculture - Child Nutrition Cluster (ALN 10.553 and 10.555); Passed through the Michigan Department of Education; All project numbers. Criteria. Under the requirements of 2 CFR Part 180, for covered transactions for procurement and nonprocurement contracts that are expected to equal or exceed $25,000, the grantee must verify that the party being awarded a procurement and nonprocurement contract is not suspended, debarred, or otherwise excluded by checking the list of excluded parties, obtaining certification from the vendor or subrecipient, or including a clause or condition to the covered transaction with that entity. Condition. For the four vendors selected for testing, the District was unable to provide evidence that the vendors were not suspended, debarred, or otherwise excluded at the time they were engaged to provide goods or services. Cause. The District does not have the proper internal controls in place to ensure that the appropriate procedures are being followed for covered transactions in accordance with the requirements of the Uniform Guidance. Effect. As a result of this condition, the District was exposed to an increased risk that disbursements of federal awards could be made to vendors or subrecipients suspended or debarred by the federal government. Questioned Costs. No costs have been questioned as a result of this finding inasmuch as no unallowable costs were identified. Recommendation. We recommend that the District review its written policies and procedures over federal awards with employees responsible for grant compliance to ensure that they are being followed consistently. View of Responsible Officials. The District will implement a process to ensure that, for any covered procurement or nonprocurement transaction, documentation is maintained confirming suspension and debarment verification was completed prior to executing the transaction.