Finding Text
2026-002 Suspension and Debarment Program Title: Water and Waste Disposal Systems for Rural Communities Assistance Listing Number: 10.760 Federal Agency: U.S. Department of Agriculture (USDA) Federal Award Number: N/A Federal Award Year: Fiscal year 2026 Pass-Through Entities: N/A Type of Compliance: Material weakness in Internal Controls over Compliance and material noncompliance. Criteria: Per 2 CRF Section 180.300, recipients must have procedures in place for verifying that an entity with which they plan to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Condition: The Village had no control procedures in place for ensuring contractors performing work on federal projects were not suspended or debarred. Cause: There were no controls in place to ensure vendors are not suspended, debarred, or otherwise excluded. Effect: The Village risks entering into contracts with excluded parties, which would be considered noncompliance with the Uniform Guidance. Questioned Costs: None. Although there was no verification that the contractors were not suspended or debarred prior to the audit, a subsequent check was performed to verify the vendor was not suspended or debarred. Perspective Information: The finding appears to be an isolated instance. No sampling was necessary to determine this finding. Identification of Repeat Findings: None Recommendations: The Village Council should, as soon as possible, update its policies to include controls for verifying contractors are not suspended or debarred. Although this is a requirement only for contracts involving the use of federal funds, the Village may want to update its policies over all procurements, not just those related to federally funded projects. Views of Responsible Officials: The Village's engineer has searched the state procurement office webpage to check if any vendor for a federal project is on the debarment list, which they are not. In the future, as part of Federal Grant Funding implementation, the Village will ensure that vendors are not debarred or suspended from federal funding awards, whether they check the list themselves or have the engineer do it as part of the bidding process and retain proper documentation.