Finding Text
Finding 2025-003: Material Weakness - Procurement, Suspension and Debarment Federal Program: Water and Waste Disposal Systems for Rural Communities Federal Agency: U.S. Department of Agriculture Assistance Listing Number: 10.760 Repeat of Prior Year Finding 2024-003 Criteria: For federal awards after January 1, 2018, guidance provided in 2 CFR part 200.318 requires non-federal entities to establish and follow their own documented procurement procedures that conform to applicable federal law and standards. 2 CFR part 200.320 includes different allowable methods of procurement. Condition/Context: During testing for this program, one of two vendors tested did not go through the appropriate procurement process. The vendor was directly awarded the project. The sample was not a statistically valid sample. Cause: The City has not historically bid out their engineering services and has used the same vendor for all projects. Effect: The City could potentially not have selected an appropriate vendor for the project. Questioned Costs: None noted. Recommendation: The City should ensure contracts are following the procurement process for selection of vendors for federally funded projects. Program personnel should become familiar with the procurement, suspension and debarment rules for federal programs and implement process changes for future projects and retain documentation of such verifications. Views of Responsible Officials: The City will be reviewing its procurement policy to define clearer expectations for the administrative staff to follow.