Finding Text
Award Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: 2021 Compliance Requirement: Procurement Pass Through Agency: Plymouth County Type of Finding: Compliance Internal Control Over Compliance – Material Weakness Criteria or Specific Requirement: In accordance with 2 CFR § 200.317 through 200.327, non-Federal entities must maintain and follow documented procurement procedures and conduct procurements in a manner providing full and open competition. Entities must also maintain documentation sufficient to demonstrate compliance with applicable procurement requirements, including the method of procurement used, contractor selection, and basis for contract award. Further, 2 CFR § 200.327 requires contracts funded with federal awards to contain the applicable contract provisions described in Appendix II to Part 200, as applicable to the nature and dollar amount of the procurement. Additionally, 2 CFR § 200.318(i) requires entities to maintain records sufficient to detail the history of procurement transactions, including rationale for the method of procurement, contractor selection, and the basis for the contract price. Condition and Context: The Town incurred $860,078 in ARPA expenditures during the fiscal year related to a renovation project. During testing, the Town was unable to provide documentation evidencing that procurement procedures were performed in accordance with Uniform Guidance or state requirements. Specifically, documentation supporting solicitation, competition, contractor selection, cost or price analysis, or other procurement procedures was not provided for audit. In addition, the Town was unable to provide an executed contract for the renovation project. As a result, the audit team was unable to determine whether the contract contained the federally required provisions outlined in Appendix II to Part 200, including any clauses applicable to the nature and amount of the award. Cause: Management did not establish or maintain adequate internal controls to ensure Federally funded procurements were conducted and documented in accordance with Uniform Guidance procurement requirements, procurement documentation was retained to support contractor selection and contract award decisions and executed contracts were maintained and reviewed to ensure inclusion of all applicable federal contract provisions. Effect or Potential Effect: Without documentation demonstrating compliance with federal procurement requirements, the Town cannot support that full and open competition was obtained or that the procurement was conducted in accordance with Uniform Guidance. Furthermore, because an executed contract was not available for review, the Town cannot demonstrate that required federal contract provisions were included. These deficiencies increase the risk of improper procurement practices, reduced transparency, and noncompliance with federal award requirements. Questioned Costs: Because the Town was unable to provide documentation supporting compliance with federal procurement requirements for the renovation project, the $860,078 in expenditures associated with the procurement are questioned. Identification as a Repeat Finding: Not a repeat finding. Recommendation: The Town should maintain documentation supporting all stages of the procurement process, including solicitation, evaluation, contractor selection, and cost or price analysis and ensure executed contracts are retained for all federally funded procurements. The Town should also implement a review process to verify that all applicable contract provisions required by Appendix II to Part 200 are included in federally funded contracts before execution. Views of Responsible Official: Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.