Finding Text
Federal Program: Coronavirus State and Local Fiscal Recovery Funds (21.027). Criteria: According to 2 CFR Section 180.300, 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 is not suspended, debarred, or otherwise excluded. Condition: The City had transactions in excess of $25,000 with a vendor in which they did not verify that the entity was not suspended, debarred, or otherwise excluded. Cause: The City did check the status of all vendors hired with a contract, but some vendors were hired with a task order. The controls were structured so that vendors hired by task order were not checked for their status, only the vendors hired with a formal contract. Effect: The City was at risk of making material payments to a vendor who is not allowed to do business with the federal government. There was no noncompliance, but there was no internal control in place to prevent noncompliance. Questioned Costs: None. Context: Payments to the five vendors totaled $35,559. Total payments from the program totaled $1,107,912. As noted above, there was no noncompliance, but there was no internal control in place to ensure noncompliance. Repeat Finding: No. Recommendation: We recommend the City check the excluded parties list system or collect certification from the entity for any vendor in which the City expects to spend more than $25,000 of federal grant funds for the year. Views of Responsible Officials and Planned Corrective Actions: We will ensure that controls are in place to check the status of potential vendors going forward. All agreements and bid terms utilizing federal grant funds will contain a certification statement for federal debarment and suspension.