Finding Text
2023 001 Procurement – Suspension and Debarment
U.S. Department of Treasury
Community Development Financial Institutions Bond Guarantee Program (ALN 21.014)
Statistically Valid Sample: No, and it was not intended to be.
Prior Year Finding: Not a repeat finding.
Finding Type: Significant deficiency and noncompliance
Criteria
Prior to entering into subawards and contracts with award funds, recipients must verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded pursuant to 31 CFR section 19.300.
Additionally, 2 CFR 200.303 (a) states that non federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Condition and Context
During our testwork over suspension and debarment, we noted the following as of the year ended September 30, 2023, for 1 of 10 items selected for testwork, we found no evidence that a suspension and debarment independent status search of SAM.gov was performed. However, the entity was able to obtain certification from the recipient through the signed loan agreement that the entity was registered in SAM.gov and in good standing.
Cause
The Organization did not perform an independent status search of the recipient to ensure that it was not suspended or debarred.
Effect
The funds could be paid to an entity that has been suspended or debarred and costs paid to the entity would be unallowable.
Questioned Costs
Cannot be determined
Recommendation
We recommend that the Organization strengthen its process to ensure that all recipients have independent status search whether they are suspended or debarred prior to entering into a loan agreement.
Views of Responsible Officials
A process and checklist will be put in place to ensure the independent status search is performed on recipients when a payment is made. The process and checklist will include a verification by someone other than the person preparing the request.