Finding Text
Criteria - 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, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended, or debarred or otherwise excluded from participating in the transaction. “Covered transactions” include those procurement contracts for goods and services awarded under non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. This requirement applies to contracts entered into to procure goods and services with Coronavirus State and Local Fiscal Recovery Funds. Condition - The Town of Charlestown does not have a specific procedure in place for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded. The Town also does not have documentation to support that the Town verified that the entities in which it entered into covered transactions to procure goods and services with Coronavirus State and Local Fiscal Recovery Funds were not suspended or debarred or otherwise excluded from participating in the transaction. Cause - The Town has not established suspension and debarment compliance policies and procedures for federal awards.Effect – Contracts for goods and service that were “covered transactions” were entered into prior to verifying that an entity was not suspended, debarred, or otherwise excluded and in those instances in which an entity was verified by the Town, the documentation to support that a verification was performed was not maintained.Questioned Costs – NoneRecommendation - We recommend that the Town implement verification procedures to ensure that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded. The procedures should require documentation to support the verification process that was performed. The verification can include checking SAM.gov for exclusions, collecting a certification from the entity, or adding a clause or condition to contract with the entity.Auditee Views - It is crucial for the Town to implement verification procedures to ensure that any entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded.Corrective Action:1. Verification Procedures Implementation: The Town should establish verification procedures to confirm the eligibility of potential transaction partners. 2. Documented Verification Process: Develop a documented verification process outlining the steps to be taken to verify the status of potential transaction partners. This process should include checking relevant databases and contacting appropriate authorities, if necessary. This can be accomplished through the use of sam.gov to verify transaction partners current standing.3. Designated Responsible Party: Assign a designated responsible party within the Town administration to oversee the verification process.4. Integration into Transaction Process: Integrate the verification procedures into the Town's transaction approval process. Ensure that verification is completed before finalizing any covered transactions.5. Regular Review and Updates: Establish a schedule for regular review and updates of the verification procedures to ensure they remain effective and up-to-date with any changes in regulations or requirements.6. Training and Awareness: Provide training to relevant staff members involved in the transaction approval process to ensure they understand the importance of the verification procedures and their role in implementing them effectively.By implementing these corrective actions, the Town will enhance its compliance with regulations, mitigate the risk of engaging in transactions with excluded entities, and ensure the integrity of its procurement and contracting processes.Responsible Official: Patrick Gormley, TreasurerAnticipated Completion Date: June 30, 2026