Finding 395078 (2023-002)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
$1
Year
2023
Accepted
2024-04-30
Audit: 305002
Organization: City of Fairburn, Georgia (GA)

AI Summary

  • Core Issue: The City failed to verify suspension and debarment status for four contractors and did not follow its own Procurement Policy.
  • Impacted Requirements: This violates federal procurement standards and could lead to noncompliant contracts, risking reimbursement to the federal government.
  • Recommended Follow-Up: Ensure all contractors are checked against the federal exclusion lists and adhere to the Procurement Policy, including obtaining necessary approvals and certifications.

Finding Text

Finding 2023 – 002 – Procurement, Suspension, and Debarment Program: Coronavirus State and Local Fiscal Recovery Fund – Federal Assistance Listing No. 21.027 Criteria: 49 CFR Part 18.36 requires grant recipients to follow the procurement standards established by their state and their own policies as long as those standards meet federal requirements. The City’s procurement standards meet Federal and State requirements. Also, in compliance with the guidance set forth in the grant agreements and with the OMB A-102 Common Rule (which applies to grants and cooperative agreements) Attachment 1 (d), all recipients are required, during the procurement process, to ensure vendors are not cited as suspended or debarred or otherwise excluded from participation in federally funded contracts. This can be accomplished by checking www.sam.gov maintained by the General Services Administration, collecting a certification from the entity, or adding a clause or condition to the contract with the vendor. Condition: During our testing of the Coronavirus State and Local Fiscal Recovery Fund (“ARPA”), it was discovered that the City did not verify whether four contractors were noted as excluded on the federal government’s suspension and debarred lists and did not include the appropriate language in the contracts with those contractors. Additionally, the City did not adhere to its established Procurement Policy and one contactor was engaged without any formal approval, quote or a bid. Possible Effects: The City could unintentionally enter into a noncompliant contract and be forced to reimburse the federal government for all expenditures made with a debarred or suspended contractor, or a contractor that the City’s governance would deem unsuitable were the proper policy followed. Based on a review of the excluded parties listing, the contractors in this case were not included as suspended or debarred. Questioned Costs: $25,000. Context: Four (4) contractors paid with ARPA funds were not noted as having the proper suspension and debarment certification in their contracts; and there was no documentation of the City’s review of the excluded party listing. One (1) contractor paid with ARPA funds was engaged without any formal approval, quote or a bid. Cause: The City did not adhere to its established Procurement Policy, and did not obtain suspension and debarment certifications from four contractors. Repeat Finding: The is a repeat finding from September 30, 2022, finding 2022-002, wherein the same weakness in controls over Suspension and Debarment were noted in testing a separate federal program.

Corrective Action Plan

The City will ensure all contactors of federal funds are not suspended or debarred in accordance with federal guidelines, including adding a clause to federal contracts. The City will also follow its procurement policy and ensure all contractor have a proper procurement.

Categories

Questioned Costs Procurement, Suspension & Debarment

Other Findings in this Audit

  • 395079 2023-002
    Material Weakness Repeat
  • 971520 2023-002
    Material Weakness Repeat
  • 971521 2023-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.218 Community Development Block Grants/entitlement Grants $311,850
20.205 Highway Planning and Construction $142,281
97.044 Assistance to Firefighters Grant $99,344
21.027 Coronavirus State and Local Fiscal Recovery Funds $49,984
45.024 Promotion of the Arts_grants to Organizations and Individuals $10,000