Finding Text
Prior Year Finding: No Federal Agency: U.S. Department of the Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: N/A Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Condition: Of the 5 selected transactions for testing, the Township was unable to provide documentation demonstrating that suspension and debarment verification was performed prior to entering into the transaction. Criteria or specific requirement: Compliance: 2 CFR 200.214 Suspension and Debarment, restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. 2 CFR 180.300 states that an entity must determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Control: Per 2 CFR section 200.303(a), a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions for the award. The internal controls should align with the Standards for Internal Control in the Federal Government or the Internal Control – Integrated Framework issued by COSO. Questioned costs: None Effect: The Township could not demonstrate compliance with the suspension and debarment requirements to verify whether the contractors were not excluded or disqualified prior to entering into the contract, however per review of SAM.gov, the contractors were not suspended or debarred. Cause: The Township did not have sufficiently documented internal controls to ensure compliance with federal suspension and debarment requirements for the retention of evidence showing the method or date of verification. Recommendation: We recommend that management review and update its policies and procedures to include suspension and debarment verification requirements and establish steps for retaining supporting documentation, such as evidence of verification obtained from SAM.gov, including the date of verification. Views of Responsible Officials: Management agrees with the finding.