Finding Text
Finding Number: 2025-001 Repeat Finding: Yes; 2024-002, 2023-002, 2022-002, 2021-002 Federal Program Name/Assistance Listing Title: Federal Transit Cluster Federal Assistance Listing Number: 20.507, 20.526 Federal Agency: U.S. Department of Transportation Federal Award Number: 5339-R-2024-GCTD-00025 Federal Pass-Through Agency: Texas Department of Transportation State Program Name: Urban State Program State Agency: Texas Department of Transportation Type of Finding: Noncompliance Material to Financial Statements and Federal/State Major Programs, Material Weakness in Internal Control Over Compliance Compliance Requirement: Procurement, Suspension and Debarment Questioned Costs: $368,203 Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition The District was unable to provide evidence that the federal guidelines were followed for purchases exceeding the small purchases and simplified acquisition threshold. Cause The District’s internal controls over procurement of goods and services were not adequate. Effect The District was not in compliance with Federal regulations and guidelines related to procurement of goods and services. Context During our testing of procurement compliance, we selected all vendors with expenditures exceeding the federal Simplified Acquisition Threshold for the fiscal year. The population consisted of one (1) vendor with total FY 2025 expenditures of $368,203. The District was unable to provide any documentation supporting the procurement method, competitive solicitation, or suspension and debarment verification for this vendor. Because the District could not produce a procurement file or alternative evidence demonstrating compliance with 2 CFR 200.318–200.326, the entire amount paid to this vendor was considered questioned costs. Recommendation The District should maintain documentation of procurement actions in the vendor file including sealed procurements issued and quotes. Review of procurement compliance should occur before the District’s funds are obligated. Views of Responsible Officials The District agrees with the finding and has taken steps to address this issue as detailed in the Corrective Action Plan.