FAC Explorer

Finding 401088 (2024-001)

Significant Deficiency
Requirement
I
Questioned Costs
-
Year
2024
Accepted
2024-06-18
Audit: 309113
Organization: Municipal Services Commission of the City of New Castle (DE)
Auditor: Cliftonlarsonallen LLP

AI Summary

  • Core Issue: A significant deficiency was found in the internal controls regarding vendor verification for suspension and debarment before payment.
  • Impacted Requirements: The Commission failed to maintain documentation to confirm that a vendor was not suspended or debarred, as required by 2 CFR section 180.995.
  • Recommended Follow-Up: The Commission should update its policies to ensure that proper documentation is kept for vendor verification before disbursing federal funds.

Finding Text

Federal Agency: U.S. Department of Environmental Protection Agency Federal Program Name: Drinking Water State Revolving Fund Cluster Assistance Listing Number: 66.468 Federal Award Identification Number and Year: 95302801, FY2022 Pass-Through Agency: State of Delaware - DNREC Pass-Through Number(s): 21000105 Award Period: February 24, 2023 through Project Completion Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Questioned Costs: None Condition/Context: One of one vendor tested did not have proper documentation maintained to support suspension and debarment verification was performed prior to them being paid with federal funds. Per sam.gov, there was no history of the vendor being suspended or debarred. Cause: The Commission’s policies and procedures did not require supporting documentation to be maintained to verify suspension & debarment check prior to entering into transactions. Effect: The Commission could make a disbursement to a vendor that is suspended or debarred. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission review its policies and procedures to require documentation be maintained to verify vendors are not suspended or debarred prior to being paid with federal funds. Views of Responsible Officials: Management agrees with the finding.

Corrective Action Plan

The Municipal Services Commission respectfully submits the following corrective action plan for the year ended March 31, 2024. Audit period: April 1, 2023 – March 31, 2024 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS—FEDERAL AWARD PROGRAMS AUDITS U.S. Department of Environmental Protection Agency 2024-001 Drinking Water State Revolving Fund Cluster – Assistance Listing No. 44.468 Recommendation: We recommend the Commission review its policies and procedures to require documentation be maintained to verify vendors are not suspended or debarred prior to being paid with federal funds. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. MSC staff did review SAM.gov prior to the bid award, however, management does agree that review could have been documented more thoroughly. Action taken in response to finding: For future projects, MSC will include a form in bid packets for potential vendors to sign certifying they have not been suspended or debarred. MSC has requested the consulting engineer include a statement in their letter of recommendation to the Commission for the bid award that the consulting engineer has reviewed SAM.gov and determined the recommended vendor(s) have not been suspended or debarred. MSC’s accounting department will review SAM.gov prior to the bid award and print the entry for the prospective vendor(s) and sign and date when they were reviewed. Name(s) of the contact person(s) responsible for corrective action: Scott Blomquist, General Manager Kendrick Natale, Comptroller Planned completion date for corrective action plan: May 24, 2024 If the U.S. Department of Environmental Protection Agency has questions regarding this plan, please call Kendrick Natale at 302-221-4517.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 977530 2024-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
66.468 Capitalization Grants for Drinking Water State Revolving Funds $1.05M
66.458 Capitalization Grants for Clean Water State Revolving Funds $669,138