Finding 1214547 (2025-001)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2025
Accepted
2026-05-12

AI Summary

  • Core Issue: The Corporation failed to verify vendors against SAM.gov for suspension or debarment before awarding contracts or making payments.
  • Impacted Requirements: This violates 2 CFR 200.214 and 2 CFR 200.318, which prohibit contracting with suspended or debarred parties.
  • Recommended Follow-Up: Implement procedures to verify vendor eligibility using SAM.gov and retain documentation of this verification.

Finding Text

Procurement Suspension and Debarment (EPA Clean Water State Revolving Fund Assistance Listing 66.458) Condition: The Corporation did not perform verification of vendors against the System for Award Management (SAM.gov) to ensure vendors were not suspended or debarred prior to the award of contracts or payments for services. Criteria: In accordance with 2 CFR 200.214 and 2 CFR 200.318, non-federal entities are prohibited from contracting with or making subawards to parties that are suspended or debarred. Entities are required to verify that vendors are not suspended or debarred, which may be accomplished through review of SAM.gov or by obtaining appropriate certifications from vendors. Effect: The Corporation is at risk of contracting with or making payments to vendors that are suspended or debarred, which could result in noncompliance with federal requirements and potential disallowance of costs. Questioned Costs: None Noted. Recommendation: We recommend that the Corporation implement procedures to verify vendor eligibility prior to awarding contracts or making payments using SAM.gov or by obtaining appropriate certifications from vendors. Documentation of this verification should be retained. Views of Responsible Officials: Management agrees with the finding and will implement procedures to verify vendor eligibility through SAM.gov or equivalent methods for applicable vendors.

Corrective Action Plan

East Rio Hondo Water Supply Corporation will implement procedures to verify vendor eligibility through SAM.gov prior to awarding contracts or processing payments related to federally funded projects. Documentation of the verification will be maintained with the related disbursement or procurement records. Responsibility for performing and documenting the verificaiton process will be assigned to accounting personnel and reviewed by management. Implementation of these procedures will begin in 2026.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 1214545 2025-001
    Material Weakness Repeat
  • 1214546 2025-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
66.458 CLEAN WATER STATE REVOLVING FUND $375,572
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $88,152