Finding Text
Finding 2022-002:
Information on the Federal Program: Assistance Listing Number 21.027 - Coronavirus State and Local Fiscal Recovery Funds, United States Department of Treasury. Pass-Through Entity: City of San Jose. Award Number: DB#647322. Compliance Requirements: Procurement and Suspension and Debarment. Type of Finding: Significant Deficiency.
Criteria: Program requirements state that the Organization was required to comply with reporting requirements related to debarment and suspension.
Condition: We noted no written policies or procedures in place to verify that an entity with which the Organization plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded.
Cause: As noted in 2022-001, the Organization did not properly document evidence of an effective control environment to provide reasonable assurance of federal compliance and experienced turnover that resulted in a loss of both first-hand knowledge and data, resulting in the specific compliance matter identified in this finding.
Effect or Potential Effect: As a result, the Organization does not appear to meet the program compliance requirement.
Questioned Costs: $0.
Context: We were unable to obtain sufficient appropriate audit evidence to determine federal compliance, however our testing of direct expenditures during the audit noted no apparent covered transactions with debarred, suspended, or otherwise excluded entities, resulting in no questioned costs.
Repeat Finding: Not applicable.
Recommendation: Formal procedures should be established to ensure compliance with federal debarment and suspension requirements.
Views of Responsible Official: Once Ewell Sterner, CEO, was made aware of the lack of grant administration and reporting, he discussed it with Jane Sanchez, CPA, to determine the extent of the inadequacy. He then pursued the path to correct it. See Corrective Action below.