Finding 38918 (2022-001)

Significant Deficiency
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2023-09-19
Audit: 44337
Organization: Town of Simla, Colorado (CO)

AI Summary

  • Core Issue: The Town lacks written procurement policies for federal grant expenditures, violating federal regulations.
  • Impacted Requirements: Compliance with Title 2 U.S. Code of Federal Regulations Part 200.318 is necessary for federal grant procurement.
  • Recommended Follow-Up: The Town should create and approve procurement policies to ensure compliance with federal requirements.

Finding Text

Federal Awards Findings 2022-001 Procurement Policy Criteria The Town received and spent federal grant funds during the year ended December 31, 2022. Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) ? 200.318 requires the Town to establish, in writing, procurement standards for use in the Town procurement (purchases) over federal grant expenditures. Condition The Town does not have written procurement (purchasing) policies and procedures for use in procuring and spending federal grant expenditures. Context During the performance of our audit procedures, we identified that the Town doesn?t have the required procurement standards in writing. Effect There is a risk that Town?s procurement of federal grant expenditures are not in compliance with the federal grant program that is funding the water system improvements project. Cause The Town?s financial activities usually do not include expenditures which are funded by federal grants. The Town?s water system improvements project is being funded by federal grant funds through a loan from the Colorado Water Resources & Power Development Authority, which is also overseen by the Colorado Department of Public Health and Environment, and through federal grants funds from the Colorado Department of Local Affairs. During the planning stages of the project and loan approval, none of these entities informed the Town of these federal requirements. Therefore, Town management was not aware of these requirements, in order to establish and approve procurement policies and procedures. Questioned Costs None. Recommendation We recommend that the Town establish and approve procurement policies and procedures for all procurement activities of the Town. View of Responsible Officials and Planned Corrective Actions See the accompanying Corrective Action Plan.

Corrective Action Plan

The Town of Simla is in the process of creating a Procurement Policy.

Categories

Procurement, Suspension & Debarment Allowable Costs / Cost Principles

Other Findings in this Audit

  • 615360 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
66.468 Capitalization Grants for Drinking Water State Revolving Funds $1.20M
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $570,000
21.027 Coronavirus State and Local Fiscal Recovery Funds $35,000