Finding Text
SIGNIFICANT DEFICIENCY; CRITERIA: 2 CFR §200.214 (Suspension and Debarment) stipulates that non-Federal entities must not enter into contracts or subawards with parties that are suspended, debarred, or otherwise excluded from Federal programs. Recipients must verify the eligibility of contractors by utilizing SAM.gov, collecting a written certification from the contractor, or including a clause in the contract requiring the contractor to certify its status.; CONDITION: During the audit, it was noted that the Town did not perform required checks to determine whether contractors or vendors selected for federally funded projects were suspended or debarred from doing business with the Federal government. Town staff reported they were not familiar with the Federal debarment requirements and did not use the System for Award Management (SAM.gov) or any other verification method before awarding contracts under FEMA‑funded projects.; EFFECT: Failure to verify contractor eligibility results in noncompliance with 2 CFR §200.214 can lead to questioned costs for the affected FEMA‑funded projects. There is increased risk that the Town would contract with an ineligible or prohibited entities which carries potential that FEMA would deobligate or seek repayment of Federal funds if a contractor is later determined to be ineligible.; CAUSE: The Town lacked written procedures addressing suspension and debarment requirements and was unaware of the mandatory steps needed to verify contractor eligibility prior to awarding federally funded work. Staff assigned to procurement and project oversight had not received training on Uniform Guidance or FEMA procurement standards.; RECOMMENDATION: The Town should implement written procedures to ensure compliance with suspension and debarment requirements for all federally funded procurements.; VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Town of Spruce Pine agrees with this finding. Finance procedures will be updated to include a suspension and debarment requirements. Town staff will be trained on the updated policies and its implementation.