Finding 22113 (2022-003)

Material Weakness
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2023-07-19
Audit: 26278
Organization: Village of Honor (MI)
Auditor: Gabridge & CO

AI Summary

  • Core Issue: The Village lacks necessary controls to verify that all parties involved in federal assistance transactions are eligible, posing a risk of non-compliance.
  • Impacted Requirements: This finding violates 2 CFR part 180, which mandates that entities must ensure eligibility of parties in federal programs.
  • Recommended Follow-Up: The Village should implement written policies and procedures to confirm eligibility for all future contracts, aligning with Uniform Guidance requirements.

Finding Text

2022-003 - Controls over Suspension and Debarment Finding Type: Material Weakness over Federal Awards Programs: Water and Waste Disposal Systems for Rural Communities (Assistance Listing Number 10.760) Criteria: Per 2 CFR ? 200.214 Suspension and debarment: Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition/Finding: The Village had no controls in place, as required by the Uniform Guidance, to ensure that all parties that the Village enters into covered transactions with are eligible for participation in federal assistance programs or activities. However, during our testing, we found that all covered transactions entered into by the Village were with eligible parties. Cause: The Village did not have written policies and procedures over procurement, including suspension and debarment, as required by the Uniform Guidance. Effect: As a result of this condition, the Village had increased risk of inadvertently entering into a covered transaction with an ineligible party. Questioned Costs: No costs have been questioned as a result of this finding. Repeat Finding: No Recommendation: We recommend that the Village Council and management adopt, and follow, written policies and procedures (that conform with requirements of the Uniform Guidance) to ensure that future contracts are properly documented and awarded in a manner that documents that the Village verified all parties under covered transactions are eligible for participation in federal programs or activities. View of Responsible Officials (Corrective Action): See corrective action plan.

Corrective Action Plan

Finding: 2022-003 ? Material Weakness over Federal Awards ? Controls over Suspension and Debarment Auditor Description of Condition and Effect: The Village had no controls in place, as required by the Uniform Guidance, to ensure that all parties that the Village enters into covered transactions with are eligible for participation in federal assistance programs or activities. However, during our testing, we found that all covered transactions entered into by the Village were with eligible parties. As a result of this condition, the Village had increased risk of inadvertently entering into a covered transaction with an ineligible party. Auditor Recommendation: We recommend that the Village Council and management adopt, and follow, written policies and procedures (that conform with requirements of the Uniform Guidance) to ensure that future contracts are properly documented and awarded in a manner that documents that the Village verified all parties under covered transactions are eligible for participation in federal programs or activities. Corrective Action: The Village agrees to the condition/finding of controls over suspension and debarment. Management and Village Council will implement a policy and controls in place no later than 12/31/23 Responsible Person: William Ward Anticipated Completion Date: December 31, 2023

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
10.760 Water and Waste Disposal Systems for Rural Communities $838,000