Finding Text
Reference Number: Prior Year Finding: 2025-011 N/A Federal Agency: U.S. Department of Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Suspension and Debarment Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Audit documentation must be made available upon request to the cognizant or oversight agency for audit or its designee, cognizant agency for indirect cost, a Federal agency, or GAO at the completion of the audit, as part of a quality review, to resolve audit findings, or to carry out oversight responsibilities consistent with the purposes of this part. Access to audit documentation includes the right of Federal agencies to obtain copies of audit documentation as is reasonable and necessary. (2 CFR 200.517(b)) Recipients and subrecipients are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards (2 CFR 200.214). Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The City could not provide complete documentation to evidence the City ensured contractors were not suspended or debarred prior to entering into the contract. Context: Two of eight contracts selected for testing were not available for review. No contract information was provided for these agreements and therefore no support related to ensuring that a contractor was not suspended or debarred was available. In addition, for an additional three of eight contracts selected for testing, documentation did not contain the necessary suspension and debarment certifications or review checks. CITY OF MANCHESTER, NEW HAMPSHIRE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED JUNE 30, 2025 (27) Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Cause: The City’s policies, procedures, and internal controls were not sufficient to ensure that contract files included or retained documentation supporting suspension and debarment verification checks. Effect: Without complete contract files and documented suspension and debarment verification, the City could not demonstrate compliance with Federal requirements. This increases the risk that Federal funds could be used in transactions with contractors that are suspended, debarred, or otherwise excluded from participation in Federal awards. Questioned costs: None. Recommendation: We recommend that the City strengthen its written policies, procedures, and internal controls to require suspension and debarment verifications before entering into Federally funded contracts and that verification be readily available for audit. Views of Responsible Officials: There is no disagreement with the finding.