Finding 388324 (2023-002)

2023-002 Methods of procurement to be followed Federal Agency: Department of Treasury CFDA Cluster Nos.: 21.027 Federal Program Cluster: Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Methods of procurement to be followed Type of Finding: Significant Deficiency Questioned Costs: $0 Criteria: 2 CFR 200.320 Methods of procurement to be followed Condition: In two instances, the City did not follow the procurement method to be followed under Uniform Guidance. In the first instance, the City claimed a higher threshold for Micro-purchases, up to $50,000 as allowed by self-certification, however evidence of the self-certification was not available. In the second instance, the City exceeded the $50,000 threshold required for method of procurement for Micro-purchases. Cause: Inaccurate interpretation of Uniform Guidance. Effect: The City’s method of procurement was not in compliance with the methods prescribed by 2 CFR 200.320 Methods of procurement to be followed. Recommendation: We recommend the City follow the methods of procurement as prescribed by 2 CFR 200.320 Methods of procurement to be followed. In addition, the City should self-certify annually and retain evidence of the self-certification for the increases threshold of Micro-purchases. Management’s Response Regarding Corrective Action Taken or Planned The City concurs with the second instance in which the City exceeds the $50,000 threshold required for the method of procurement for Micro-Purchases. The City corrected the public works contract template using federal funds not to exceed $50,000 and has updated the City internal website to reflect the updated contract templates and provide guidelines for public work projects using federal funds under the micro-purchase thresholds. For the first instance, the City believes some form of self-certification was performed as the procurement policy was updated and reviewed by internal management level and was approved by the council in FY2023. However, moving forward, the city will include an approved annual memo on the review of the purchasing policy to further strengthen the self-certification documentation.