Finding 386206 (2023-001)

UNITED STATES DEPARTMENT OF AGRICULTURE Significant Deficiency in Internal Control over Compliance 2023-001 Child Nutrition Cluster; ALN # 10.555 Award Period: July 1, 2022 – June 30, 2023 Compliance Requirement: Suspension and Debarment Criteria or Specific Requirement: The Code of Federal Regulations (CFR) Title 2 Part 200.214 states that nonfederal entities are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations 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 and Context: For two (2) of five vendors in our audit sample, documentation provided did not support that the City’s verifications of vendor status was performed timely for the period under audit. Questioned Costs: None. The vendors were not suspended or debarred. Cause: Procedures were not in place to verify vendors’ status timely for all vendors. Effect: While this did not occur in the instances identified in this finding, lack of timely verification of vendors’ debarment or suspension status could cause federal grant funds to be expended with vendors that are excluded from participation in Federal assistance programs or activities. Repeat Finding: No. Recommendation: We recommend procedures be strengthened to timely document the verification that all vendors are not suspended or debarred from participation in Federal assistance programs or activities. Views of Responsible Officials: Management agrees with the finding.