Finding Text
2025-005 Procurement and Suspension and Debarment Prior Year Finding Number: 2024-006 Year of Finding Origination: 2020 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP3474, 2021 Pass-Through Agency: N/A – Federal Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction with the contracting party. Condition: The County did not verify that vendors were not debarred, suspended, or otherwise excluded from participation in federal assistance programs or activities before entering into the covered transactions. Questioned Costs: $217,587; known questioned costs were determined based on payments to vendors with federal funds from this program that exceeded $25,000 in 2025. Context: This issue is reported for this major program; however, it impacts federal programs county-wide. The County has revised its procurement policies to include components of federal procurement requirements related to suspension and debarment; these are pending review and approval by the Board of County Commissioners. The vendors paid with federal funds from this program were not listed as suspended or debarred on SAM.gov at the time of audit. Total federal expenditures for this program were $336,448. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded prior to entering into a covered transaction may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services under the grant. Cause: The County’s written procurement policy does not include requirements specific to suspension and debarment. Recommendation: We recommend the County review and approve their revised policy that includes the requirements specific to suspension and debarment and maintain documentation to demonstrate that vendors were not suspended, debarred, or otherwise excluded from conducting business with the County; the County should complete this documentation prior to entering into a covered transaction. View of Responsible Official: Concur