Finding 387726 (2023-003)

2023-003 Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: 1505-0271 - 2021 Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters 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 or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; of (b) Collecting a certification from that person; or (c) Adding a clause of condition to the covered transaction with that person. Controls: 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 non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the ”Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Town did not determine the suspension and debarment status of vendors with expenditures exceeding $25,000 on a timely basis, as required by federal regulations. Questioned Cost: None Context: Two of the Two vendors we selected for testing had the suspension and debarment status verified, however it was not performed timely. Cause: The Town’s procedures and internal controls over suspension and debarment are not sufficient to ensure that all vendors’ suspension and debarment status is verified timely. Effect: Failure to verity the suspension and debarment status of vendors may result in the Town issuing payments to vendors what are suspended and debarred and not authorized to provide services under the program. Repeat Finding: No Recommendation: We recommend management ensure policies and procedures include the three options for determining suspension and debarment status listed in 2 CFR 180.300 and that controls are sufficient to ensure that the suspension and debarment status is verified for all vendors prior to issuance of the contract. View of responsible officials and planned corrected actions: Management concurs with this finding. Management has implemented a policy going forward to ensure all vendors entered into a contract will sign a suspension and debarment agreement.