Finding Text
Federal agency: U.S. Department of Energy
Federal program title: ARRA – State Energy Program
Assistance Listing Number: 81.041
Pass-Through Agency: Minnesota Department of Commerce
Pass-Through Number(s): CFMS B38838
Award Period: N/A – Revolving Loan
Type of Finding:
• Material Weakness in Internal Control over Compliance
Criteria or specific requirement: Item 5c. of Exhibit A of the State of Minnesota Intergovernmental Unit Agreement with the Port Authority states that in the performance of its duties, the Port shall not make any loan to or contract with any party that is debarred or suspended or is otherwise excluded from or ineligible for participation in Federal assistance programs under Executive Order 12549, “Debarment and Suspension.”
Condition: During testing of the suspension and debarment requirements with regards to new loans entered into during the year, it was noted that the formal documentation of proper suspension and debarment procedures was not retained in all cases.
Questioned costs: None.
Context: Of the five loans that were selected for testing, we noted two which did not contain formal documentation for suspension and debarment procedures.
Cause: The Port Authority experienced turnover among personnel that performed and retained documentation of the suspension and debarment checks.
Effect: A lack of proper controls related to suspension and debarment could potentially result in issuing a loan to an entity that is debarred or suspended from participation in federal assistance programs and therefore could result in questioned costs incurred.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend that the Port re-implement its previous controls of using a tracking checklist and retaining timestamped screenshots of SAM.gov prior to funding any State Energy Program loan.
Views of responsible officials: There is no disagreement with the audit finding.