Finding Text
Department of Energy and Passed through Nebraska Department of Environment and Energy Federal Financial Assistance Listing 81.254, 2025-150224869 Grid Infrastructure Deployment and Resilience Procurement, Suspension & Debarment Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.318 maintains that recipients must have and use documented procurement policies and must conform procurement standards in sections 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are applicable. Additionally, 2 CFR 200.214 requires recipients to restrict the subawards and contract with certain parties that are debarred, suspended, or excluded from ineligible participation in Federal assistance programs or activities. Condition: Testing of expenditures under the federal program identified opportunities to strengthen the District’s procurement and vendor compliance documentation practices. Specifically: -The District has not formalized and adopted a written procurement policy. - In two instances involving covered transactions exceeding $25,000, documentation was not retained to demonstrate that a verification was performed to confirm the vendor was not suspended or debarred from participation in federally funded programs. - In two instances, supporting documentation was not maintained to demonstrate the procurement method utilized and the basis for vendor selection. Cause: Covered transactions were not evaluated compared to Uniform Guidance as it relates to procurement methods and suspension and debarment. Effect: Ineffective controls over this area of compliance could result in a reasonable possibility the District would be noncompliant with the compliance requirements outlined above. Additionally, the District may enter into a covered transaction with a vendor that is suspended or debarred. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 2 out of 5 vendors were selected for testing. Repeat Finding from Prior Year: No Recommendation: We recommend the District implement a procurement policy that complies with Uniform Guidance. In addition, we suggest that management implement procedures and control processes related to the review of covered transactions to ensure the procurement methods are being followed and any contracts include the required Uniform Guidance provisions. Also, management should ensure vendors are not suspended or debarred from doing business with the federal government prior to entering into work with the vendor. Views of Responsible Officials: Management agrees with the finding.