Finding 403155 (2023-001)

2023-001 Improve Controls and Documentation Over Procurement Federal Agency: U.S. Department of the Treasury Cluster/Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Fund AL Numbers: 21.027 Award Year: 2023 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding Compliance Internal Control over Compliance - Significant Deficiency Criteria or Specific Requirement Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Local municipalities are also required to use the same state procurement policies and procedures for federal funds as for non-federal funds, the Town is required to follow Massachusetts General Laws, Chapter (MGL) 30(b). MGL 30(b) requires the solicitation of three written or oral quotes for procurements of supplies between $10,000 and $49,999 and sealed bids or proposals for procurements of supplies $50,000 and over. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context There was no evidence to support that one disbursement properly followed the procurement process before payments for services were made to the vendor. Cause Weaknesses in the design and operation of controls. 2023-001 Improve Controls and Documentation Over Procurement (Continued) Effect or Potential Effect Due to the weaknesses in internal controls noted above, there is a risk that procurements may be awarded to vendors in a manner that is not consistent with federal procurement requirements. Known questioned costs are reported equal to $82,800, as follows: AL Questioned Number(s) Name of Federal Program or Cluster Costs 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Fund $82,800 Recommendation The Town should address the weaknesses in internal controls noted above in order to ensure that federal procurements are conducted in accordance with federal and state requirements. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.