Finding Text
Criteria: The Uniform Guidance requires non-federal entities to maintain written procurement policies and procedures that comply with federal regulations, ensuring procurements are conducted through full and open competition while avoiding conflicts of interest. In addition, unless a waiver is obtained, the City must comply with the Build America, Buy America (BABA) Act's domestic preference provisions for all infrastructure projects. Under Section 70914 of the BABA Act, all iron, steel, manufactured products, and construction materials used in these projects must be produced in the United States. The Uniform Guidance further requires the City to maintain documented procurement procedures and monitor contractor compliance with project agreement terms, including BABA provisions. Condition: During our audit, we identified the City had not adopted documented procurement procedures until after the audit period concluded. As a result, the required policies under the Uniform Guidance (2 CFR Part 200.318) were not in place during the period under audit. Additionally, while the City included BABA provisions in its contract agreements, it failed to establish monitoring policies and procedures to verify contractor compliance with the BABA requirements. Cause: The entity has not developed or implemented written procurement policies and procedures. Additionally, the City did not establish policies and procedures to monitor contractor compliance with BABA requirements. Effect: Without documented procurement policies, there is an increased risk of non-compliance with federal procurement standards, potential conflicts of interest, and inefficient use of federal funds. As a result, the City did not ensure contractors complied with the BABA provisions. Repeat Finding: Similar finding in the prior year. Recommendation We recommend that the entity develop and implement written procurement policies and procedures that comply with the Uniform Guidance. These policies should include standards of conduct covering conflicts of interest, procurement methods, and documentation requirements. Additionally, the City should implement and enforce policies and procedures to monitor infrastructure projects to ensure contractor compliance with BABA requirements.