Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Project Funding (CPF) Program Assistance Listing Number: 14.251 Federal Award Identification Number and Year: B-22-CP-MN-0492, 2025 Award Period: January 1, 2025 – December 31, 2025 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: The non‑federal entity is required to have controls in place to ensure compliance with suspension and debarment requirements. Uniform Guidance (2 CFR §200.214) requires non‑federal entities to verify that contractors are not suspended or debarred from participating in federal programs. Verification may be accomplished by reviewing the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), obtaining a certification from the contractor, or by including a clause or condition in the covered transaction. Condition: The City did not maintain documentation demonstrating that required suspension and debarment verifications were performed for contractors associated with the Community Project Funding program. Questioned costs: None. Context: During testing of compliance with suspension and debarment requirements for the Community Project Funding program, the auditors reviewed covered transactions subject to suspension and debarment requirements. Documentation evidencing verification through SAM.gov or other allowable methods was not retained for the transactions tested. Cause: The City does not have a formalized policy or documented procedures requiring suspension and debarment verification to be performed and retained for covered transactions associated with federal programs. Effect: Failure to perform and document required suspension and debarment procedures could result in the City entering into transactions with entities that are suspended or debarred, resulting in potential noncompliance with federal requirements. Repeat Finding: No. Recommendation: We recommend the City formalize suspension and debarment compliance procedures in a written policy and ensure verification is performed and documented for all covered transactions prior to entering into contracts funded by Community Project Funding. Views of responsible officials: There is no disagreement with the audit finding. Management acknowledges the need to formalize suspension and debarment procedures and will implement controls to ensure required verifications are performed and documented for applicable transactions.