Finding Text
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Prior to entering into subawards and covered procurement contracts funded by federal awards, recipients must verify that contractors, subcontractors, and subrecipients are not suspended, debarred, or otherwise excluded from participating in federally funded projects. Per 2 CFR § 180.300, this verification must be completed prior to transaction execution and documented using one of three approved methods: reviewing the System for Award Management (SAM.gov) exclusions database, obtaining a signed compliance certification, or adding a formal suspension and debarment clause directly into the legally executed agreement. Condition: During the audit over suspension and debarment, we were not able to obtain documentation evidencing whether vendors were checked against the SAM database or whether suspension and debarment certifications were obtained prior to awarding the contracts. Cause: While formal policies and procedures have been created by the City, they were not being consistently monitored or enforced during Fiscal Year 2025 to ensure required suspension and debarment verifications and supporting documentation were obtained and retained prior to contract awards. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. No support was provided for 2 out of 2 Federal Transit Cluster vendors selected for testing to show suspension and debarment check was performed prior to awarding the contracts. Identification as a Repeat Finding, If Applicable: 2024-003. Recommendation: We recommend the City strengthen its monitoring procedures over suspension and debarment compliance to ensure vendors are verified against the SAM database or that required suspension and debarment certifications are obtained prior to contract award. In addition, the City should ensure supporting documentation evidencing compliance is consistently maintained and retained in the procurement files in accordance with federal requirements and City policies. Views of Responsible Officials: The City implemented a new review, tracking and documentation process for all procurements during FY 2023-24. Staff were instructed to perform checks of all vendors -- regardless of the nature of the funding for the project – against SAM.GOV to check for disbarment. A PDF of the results for each vendor is saved in a project folder attached to each procurement. These files are stored on an internal network drive. During FY 2024-25, due to turnover in purchasing staff in Finance and transition of duties, there was a lapse in checking all procurements against SAM.GOV. This process has been reviewed with staff involved in procurement and regular checks are being conducted. Management feels this finding will be cleared in FY 2025-26.