Finding Text
SA2025-001: Suspension or Debarment Verification (Significant Deficiency) Assistance Listing Number: 20.205 Assistance Listing Title: Highway Planning and Construction Name of Federal Agency: U.S. Department of Transportation Criteria Per 2 CFR section 180.300, 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 is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions 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. Condition During performance of testing we noted that the suspension and debarment status of two contractors were not verified prior to entering into procurement contracts. The City did retroactively verify that the two contractors were not suspended or debarred through checking the SAM.gov exclusions list in December 2025, however no such checks in SAM.gov, vendor certifications, or equivalent verification were completed prior to entering into the contracts. Cause The City did not verify the suspension and debarment status of two contractors prior to entering into procurement contracts, and staff were not trained on this compliance requirement. Effect Failure to perform suspension and debarment verification procedures before the procurement of goods or services could result in the payment of federal funds to contractors that are ineligible to participate in federal assistance programs. Recommendation We recommend that the City incorporate specific language into its standard procurement contracts regarding suspension and debarment requirements. Additionally, we recommend the City require suspension and debarment verifications be completed and documented by staff before procurement of goods and services to be paid for with federal funds. Management Response There is no disagreement with the audit finding.