Finding 1205604 (2024-003)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2024
Accepted
2026-03-31
Audit: 397291
Organization: Medina County (OH)

AI Summary

  • Core Issue: The County failed to verify that vendors were not suspended or debarred before making payments over $25,000, risking noncompliance with federal procurement rules.
  • Impacted Requirements: Non-Federal entities must check SAM exclusions and maintain detailed procurement records as per 2 CFR regulations and County policies.
  • Recommended Follow-Up: Implement controls to verify vendor status and ensure proper documentation of procurement history for all transactions involving federal funds.

Finding Text

Finding Number: 2024-003 AL Number and Title: Federal Transit Cluster Federal Award Identification Number / Year: OH-2020-048-00, OH-2021-014-00, OH-2021-033-00, OH-2022-021-00, OH-2023-034-00, OH-2022-003-00, OH-2022-021-00 Federal Agency: U.S. Department of Transportation Compliance Requirement: Procurement, Suspension, and Debarment Pass-Through Entity: N/A Repeat Finding from Prior Audit? No Material Weakness and Noncompliance 2 CFR § 1200.10 states, in part, this part adopts the Office of Management and Budget (OMB) guidance in subparts A through I of 2 CFR part 180, as supplemented by this part, as the Department of Transportation policies and procedures for nonprocurement suspension and debarment. It thereby gives regulatory effect for the Department of Transportation to the OMB guidance as supplemented by this part. In addition, 2 CFR § 1201.1 indicates except as otherwise provided in this part, the Department of Transportation adopts the Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200). This part supersedes and repeals the requirements of the Department of Transportation Common Rules (49 CFR part 18 and part 19). 2 CFR § 180.305 states that Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred or whose principals are suspended or debarred, unless the Federal agency responsible for the transaction grants an exception under 2 CFR § 180.135. 2 CFR § 180.200 identifies “covered transactions” as nonprocurement or procurement transactions at the primary tier, between a Federal agency and a person; or at the lower tier, between a participant in a covered transaction and another person. Procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) are covered transactions if the contracts are expected to equal or exceed $25,000 or meet certain other specified criteria outlined in 2 CFR § 180.220 and 2 CFR § 1200.220. All nonprocurement transactions as defined in 2 CFR § 180.970 (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless exempt by 2 CFR § 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 is not suspended or debarred or otherwise excluded. This verification may be accomplished by checking SAM exclusions (https://sam.gov/content/home); collecting a certification from the entity, or adding a clause or condition to the covered transactions with that entity. In addition, the Medina County Transit Purchasing Policies and Procedures Manual III-5 Responsible Bidder section requires documentation of an excluded parties list search for contractors and subcontractors whose contract exceeds $25,000. 2 CFR § 200.318 requires the non-Federal entity to maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the Medina County Transit Purchasing Policies and Procedures Manual I-14 Source Selection requires the Transit Director to maintain records detailing the listing of procurement, including the selection of type of contract type, reasons for selection, basis for contract price, and rationale for method of procurement. The County did not have proper internal controls in place to verify that all entities, with whom the County had entered covered transactions, had not been suspended or debarred. There were three instances in which the Federal Transit Cluster grant made total payments to vendors of more than $25,000 and there was no evidence the County checked the SAM exclusions, collected a certification from the entity, or added a clause or condition to the covered transactions with the vendors. In addition, for 24 of 27 procurement transactions, the County did not maintain adequate documentation to detail the full history of procurement. Failure to have appropriate controls in place may result in vendors receiving federal funds that are suspended or debarred, and noncompliance with federal procurement requirements. The County should verify vendors are not suspended or debarred by checking the SAM exclusions, collecting a certification from the vendor, or adding a clause or condition to the covered transaction with the vendor prior to contracting with vendors that will be paid with federal funds. In addition, the County should maintain documentation of the history of procurements.

Corrective Action Plan

Finding Number: 2024-003 Planned Corrective Action: Medina County acknowledges the deficiencies identified related to procurement documentation and suspension and debarment compliance under the Federal Transit Cluster. To address these issues, the County has implemented the following corrective actions: 1. Suspension and Debarment Verification Controls Effective immediately, prior to execution of any covered transaction funded in whole or in part with federal funds that is expected to equal or exceed $25,000, the Transit Department will verify vendor eligibility by performing a search of the System for Award Management (SAM.gov). Evidence of the SAM search, including the date performed and results, will be retained in the procurement file. In addition, all federally funded procurement contracts will include a standard suspension and debarment certification clause, or alternatively, a signed vendor certification will be obtained and retained when applicable. 2. Standardized Procurement Documentation The County will implement a standardized procurement checklist to be completed for all Transit procurements. This checklist will require documentation of: o The rationale for the method of procurement o The basis for contractor selection or rejection o The selection of contract type o The basis for contract price Completed checklists and supporting documentation will be maintained as part of the official procurement file in accordance with 2 CFR § 200.318 and the Medina County Transit Purchasing Policies and Procedures Manual. 3. Supervisory Review and Oversight The Transit Director, or designee, will perform a documented supervisory review of each procurement file prior to contract execution to ensure all required federal and County documentation is complete. No procurement will proceed without evidence of this review. 4. Training and Accountability Staff involved in Transit procurement activities will receive refresher training on federal procurement requirements, including suspension and debarment and procurement documentation standards. Compliance with these procedures will be monitored on an ongoing basis. Anticipated Completion Date: Implemented immediately and fully operational by March 31, 2026 Responsible Contact Person: Shannon Rine, Transit Director

Categories

Procurement, Suspension & Debarment Subrecipient Monitoring

Other Findings in this Audit

  • 1205598 2024-003
    Material Weakness Repeat
  • 1205599 2024-003
    Material Weakness Repeat
  • 1205600 2024-003
    Material Weakness Repeat
  • 1205601 2024-003
    Material Weakness Repeat
  • 1205602 2024-003
    Material Weakness Repeat
  • 1205603 2024-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.558 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES $2.45M
93.563 CHILD SUPPORT SERVICES $2.42M
93.658 FOSTER CARE TITLE IV-E $1.90M
93.778 MEDICAL ASSISTANCE PROGRAM $812,590
10.561 STATE ADMINISTRATIVE MATCHING GRANTS FOR THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM $618,106
93.659 ADOPTION ASSISTANCE $503,940
93.788 OPIOID STR $450,126
20.507 FEDERAL TRANSIT FORMULA GRANTS $427,154
14.267 CONTINUUM OF CARE PROGRAM $213,270
16.034 CORONAVIRUS EMERGENCY SUPPLEMENTAL FUNDING PROGRAM $197,917
93.044 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART B, GRANTS FOR SUPPORTIVE SERVICES AND SENIOR CENTERS $194,990
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $183,071
93.767 CHILDREN'S HEALTH INSURANCE PROGRAM $181,293
20.205 HIGHWAY PLANNING AND CONSTRUCTION $144,820
84.181 SPECIAL EDUCATION-GRANTS FOR INFANTS AND FAMILIES $100,539
93.116 PROJECT GRANTS AND COOPERATIVE AGREEMENTS FOR TUBERCULOSIS CONTROL PROGRAMS $98,032
93.958 BLOCK GRANTS FOR COMMUNITY MENTAL HEALTH SERVICES $88,516
93.667 SOCIAL SERVICES BLOCK GRANT $75,884
93.556 MARYLEE ALLEN PROMOTING SAFE AND STABLE FAMILIES PROGRAM $72,961
93.575 CHILD CARE AND DEVELOPMENT BLOCK GRANT $63,899
93.674 JOHN H. CHAFEE FOSTER CARE PROGRAM FOR SUCCESSFUL TRANSITION TO ADULTHOOD $38,983
93.045 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART C, NUTRITION SERVICES $37,500
93.747 ELDER ABUSE PREVENTION INTERVENTIONS PROGRAM $34,327
97.042 EMERGENCY MANAGEMENT PERFORMANCE GRANTS $22,782
20.703 INTERAGENCY HAZARDOUS MATERIALS PUBLIC SECTOR TRAINING AND PLANNING GRANTS $22,088
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $20,025
84.027 SPECIAL EDUCATION GRANTS TO STATES $16,896
14.228 COMMUNITY DEVELOPMENT BLOCK GRANTS/STATE'S PROGRAM AND NON-ENTITLEMENT GRANTS IN HAWAII $13,275
93.959 BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE $13,087
93.053 NUTRITION SERVICES INCENTIVE PROGRAM $12,681
21.016 EQUITABLE SHARING $12,417
93.071 MEDICARE ENROLLMENT ASSISTANCE PROGRAM $9,580
20.513 ENHANCED MOBILITY OF SENIORS AND INDIVIDUALS WITH DISABILITIES $7,897
10.553 SCHOOL BREAKFAST PROGRAM $7,221
20.608 MINIMUM PENALTIES FOR REPEAT OFFENDERS FOR DRIVING WHILE INTOXICATED $6,863
93.472 TITLE IV-E PREVENTION PROGRAM $6,766
16.575 CRIME VICTIM ASSISTANCE $6,551
20.600 STATE AND COMMUNITY HIGHWAY SAFETY $5,779
97.047 BRIC: BUILDING RESILIENT INFRASTRUCTURE AND COMMUNITIES $4,046
84.173 SPECIAL EDUCATION PRESCHOOL GRANTS $3,711
93.645 STEPHANIE TUBBS JONES CHILD WELFARE SERVICES PROGRAM $2,743
10.555 NATIONAL SCHOOL LUNCH PROGRAM $2,109