Finding Text
Finding 2022-001 (Significant Deficiency): Assistance # 21.027 ? COVID-19 America Rescue Plan Act of 2021 Federal Award # and Year: MO1416-T1, 2021 Name of Federal Agency: U.S. Department of Treasury Name of Pass-Thru Agency: State of Missouri Office of Administration/Division of Accounting Type of Compliance Finding: I ? Procurement and Suspension and Debarment Condition: Prior to entering into contracts with award funds, the City did not verify that contractors were not suspended, debarred, or otherwise excluded pursuant to 31 CFR section 19.300. Criteria or Specific Requirement: Per 31 CFR Section 19.300, the City is responsible for verifying that the contractor is not excluded or disqualified from doing business before entering into a covered transaction. The City is required to perform a verification check, collect a certification, or add a clause to the contracts. Questioned Costs: None Context: For both of the contracts tested, the City did not verify contractors were not suspended or debarred. The sample size was determined based upon guidelines provided by the AICPA which is not a statistically valid sample. Cause: The City does not have a procedure in place to ensure verification checks are performed, certifications are obtained or clauses are added to contracts. Effect: Suspended or debarred contractors could be used for federal contracts. Recommendation: We recommend that the City review guidance surrounding suspending and debarment requirements and implement procedures to ensure that all requirements are met for future contracts. Management Response (Unaudited): The City will institute a policy for contracts to require a verification check, collect a certification, or add a clause to the contract.