Finding Text
2024-003 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: 2024; FAIN not available. Award Period: January 1, 2024 through December 31, 2024 Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material weakness in internal control over compliance Criteria or Specific Requirement: The United States Code of Federal Regulations (CFR) Title 2, Part 200.319 indicates procurement transactions under the Federal award must be conducted in a manner that provides full and open competition. Additionally, 2 CFR Part 200.320 indicates that for any allowable method chosen, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the requirements of 2 CFR Part 200, Subpart D. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR Part 180.995 and agency adopting regulations, 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), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR Part 180.300). 2 CFR Part 200.303 indicates that non-Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The Borough did not maintain documentation to support the suspension and debarment procedures performed for covered transactions in order to demonstrate compliance with 2 CFR Part 180 and 2 CFR Part 200. Questioned Costs: None. Context: One (1) of two (2) selections subject to suspension and debarment compliance requirements did not include adequate documentation to demonstrate that the Borough properly verified the vendor was not suspended or debarred prior to entering into the services agreement. Cause: Procedures were not implemented to maintain documentation to support compliance with the standards of suspension and debarment contained in 2 CFR Part 180 and 2 CFR Part 200. Effect: Compliance with the requirements of the federal award could not be demonstrated. Repeat Finding: No Recommendation: We recommend management enhance procedures and controls to ensure documentation is maintained to support all suspension and debarment verifications related to expenditures from federal award programs. Such documentation should be consolidated and maintained in a secure, accessible location. Views of Responsible Officials: Management agrees with the finding.