Finding 380515 (2023-002)

21.027 Coronavirus State and Local Fiscal Recovery Funds Noncompliance with Procurement, Suspension and Debarment and Significant Deficiency in Internal Controls Criteria: 2 CFR Part 200.214 indicates “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: The City did not maintain documentation or have appropriate processes and procedures in place to ensure that prior to awarding contracts to outside parties the suspended or debarred list was checked to ensure the potential awardee was not prohibited from receiving federal funds. Cause: The City did not have policies and procedures in place to ensure the suspended and debarred list was checked consistently nor did they retain documentation of the list being checked prior to contracts being awarded to awardees. Effect: The City could award contracts to suspended or debarred parties. Questioned Costs: None Recommendations: We recommend the City implement processes and procedures to ensure the suspended and debarred listing is checked prior to awarding contracts to outside parties. In addition, we recommend the City maintain documentation of this check being performed. Views of responsible officials: Fiscal year 2022-23 was a challenging year for the City of Newport due to staff turnover and vacancies for key positions in Engineering, Public Works and Finance. Processes were in place to ensure that vendors were not on the suspended or debarred list prior to awarding contracts. However, due to key staff turnover, the documentation was not available to verify that the process was followed. The Finance Department and Engineering will work on a checklist to make sure all adequate written documentation is centrally kept with the awarded contract before awarding the contract.