Finding 394375 (2022-003)

Federal and State Agencies: Federal Transit Administration and Wisconsin Department of Transportation Federal and State Program Names: Federal Transit Cluster and Transit Operating Aids/Transit Operating Aids – Chapter 85.205 Assistance Listing Number and State Program Number: 20.507, 20.525, and 395.104 Federal and State Award Identification Numbers and Year: WI-2017-004(03) – 2017; WI-2020-016 (01 CARES) – 2020; WI-2020-041(Oper) – 2020; WI-2021-003 (Cap) – 2021; WI-2022-008 (Oper) – 2022; 2022 WI Operating Award Periods: January 3, 2017 – December 31, 2022; June 12, 2020 – March 30, 2026; July 7, 2020 – March 30, 2024; December 21, 2020 – March 30, 2025; December 14, 2021 – March 30, 2025; January 1, 2022 – December 31, 2022 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The City should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, we noted 3 of the 13 procurement transactions selected for testing as part of statistically valid sample, did not follow the City's procurement policy related to documentation of vendor selection criteria for small purchases. The City applied the requirements of micro-purchases to these transactions. Questioned costs: None Context: The City's procurement policy in effect for the year under audit identified an outdated micro-purchases threshold. The City adopted in practice the updated micro-purchase threshold identified in 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award, but did not update it’s written procurement policy. Cause: The City did not review and update the procurement policy in effect to comply with updated threshold identified in the most current Uniform Guidance requirements. Effect: The auditor noted no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of consistent internal control policies over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: The finding is not a repeat of a finding. Recommendation: We recommend the City design controls to ensure an adequate review, and update as necessary, of policies occurs when changes in practice or regulation occur. Views of responsible officials: There is no disagreement with the audit finding.