Finding 4254 (2021-003)

Finding Reference Number: SA2021-003 - Suspension and Debarment for Contracts and Subcontracts Assistance Listing Numbers: 21.019 Assistance Listing Title: COVID-19 – Coronavirus Relief Fund Name of Federal Agency: Department of Treasury Pass Through Entity: State of California Department of Finance Stanislaus County Federal Award Identification Number: 163 SLT0163 Criteria: Exhibit A – Federal Requirements in the City’s CARES Coronavirus Relief Fund (CRF) Subrecipient Agreement with Stanislaus County requires that the City comply with OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), 2 C.F.R. Part 180, including the requirement to include a term or condition in all lower tier covered transactions (contracts and subcontracts described in 2 C.F.R. Part 180, subpart C) that the award is subject to 2 C.F.R. Part 180. Condition: We selected forty transactions for testing and although some were exempt from the suspension and debarment procurement requirements, we understand that the City did not verify that the contractors, subrecipients and small business grant recipients were not suspended, debarred, or otherwise excluded prior to entering into the agreements. We did note that City staff determined that as of December 7, 2023, none of the 152 small business grant recipients were included on the exclusions list on SAM.gov. Cause: We understand that staff responsible for performing the suspension and debarment reviews are no longer with the City and City staff cannot find documentation that it was performed. The former City Manager did sign certifications in December 2020 and January 2021 indicating that the small business grant recipients met “required criteria,” but it was not specific to suspension and debarment, and again, documentation of compliance with the grant agreement requirements was not retained. Effect: The City is not in compliance with the subrecipient agreement terms and conditions. Recommendation: The City should develop procedures to ensure compliance with debarment and suspension provisions of the Subrecipient Agreement prior to making disbursements to contractors, subrecipients or small businesses. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.