Finding Text
United States Department of the Treasury Reference Number: 2024-011 Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Federal Award Number: 51-6000255 Type of Finding: Noncompliance and Significant Deficiency in Internal Controls over Compliance Compliance Requirement: Procurement Condition: During our audit of procurement transactions related to the SLFRF, we noted one instance where the Town acquired underground primary wire at a cost of $213,900 without documenting the quotes received or the procurement procedures, as required by federal regulations. A similar finding was reported in prior years’ audits. Criteria: Under 2 CFR §200.318-§200.326, non-federal entities must follow documented procurement procedures that reflect applicable state, local, and tribal laws and regulations, provided those procedures conform to federal standards. This purchase exceeded the $50,000 micro-purchase threshold, so it required the Simplified Acquisitions Procedures. Those procedures require obtaining quotes and documenting the procurement procedures. Cause: The Town did not document its procurement policies due to turnover in key positions during the year. Effect: The Town was not in compliance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) at 2 CFR §200.318-§200.326. The lack of documenting the quotes received and procurement procedures followed increases the risk that the Town may not receive the best prices or terms for the goods and services it purchases. Recommendation: We recommend that the Finance Department enhance its processes and oversight surrounding federal procurement requirements. Views of Responsible Town Officials and Planned Corrective Actions: See corrective action plan. Responsible Positions: Town Manager and Director of Finance