Finding Text
Criteria: According to 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, debarred or otherwise excluded. Condition: The District had transactions in excess of $25,000 with three vendors in which they did not verify that the vendor is not suspended, debarred or otherwise excluded. Questioned Costs: None. Context: Payments to the three vendors totaled $459,201 for the year ended June 30, 2025. Effect: The District was at risk of making material payments to a vendor who is not allowed to do business with the federal government. There was no noncompliance, but there was no internal control in place to prevent noncompliance. Cause: The District was not aware of this requirement. Recommendation: We recommend the District check the Excluded Parties List System or collect certifications from the entity for any vendor in which the District expects to spend more than $25,000 of federal grant funds for the year. Management's Response: We were not aware of this requirement, but we will ensure that we comply going forward.