Finding Text
Failure to Verify Contractor Suspension and Debarment Status. Condition: The City did not verify the suspension or debarment status of a contractor prior to awarding a federally funded contract during the audit period. Criteria: Federal regulations (2 CFR 200.214) require recipients of federal funds to ensure that contractors are not suspended or debarred prior to awarding a contract. Verification may be documented through a SAM.gov search, a contractor certification, or a contract clause addressing suspension and debarment. Cause: The City's current procurement procedures do not specifically outline how suspension and debarment checks should be performed or documented. Staff were unaware of the requirement. Effect: The City increased the risk of awarding federal funds to a contractor who may be suspended or debarred, which could result in noncompliance with federal regulations and potential disallowance of costs. Questioned Costs: None. Recommendation: We recommend the City update its procurement procedures to include a clear process for verifying and documenting suspension and debarment status for all federally funded contracts. Acceptable documentation includes a printed SAM.gov search, a contractor certification, or a contract clause addressing the requirement. Management Response: Management agrees with the finding. The City will revise its procurement procedures and train staff to ensure verification is completed and retained for all federally funded procurements.