Finding Text
FINDING NUMBER: 2022-007 FEDERAL AGENCY: U.S. DEPARTMENT OF THE TREASURY PASS-THROUGH AGENCY: P.R. DEPARTMENT OF TREASURY - PUERTO RICO FISCAL AGENCY AND FINANCIAL ADVISORY AUTHORITY FEDERAL PROGRAM: CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS (ALN 21.027) REQUIREMENT: PROCUREMENT SUSPENSION & DEBARMENT (I) TYPE OF FINDING: SIGNIFICANT DEFICIENCY (SD) / NONCOMPLIANCE (NC) CONDITION: In our Procurement Contract Provision Test, we evaluated four contract agreements. We found that the Municipality validated prior to award the contract that the supplier was not listed as a debarred, suspended, or otherwise excluded by agencies in the System for Award Management (SAM) for one (1) of the contracts. The validation of one (1) of the other three (3) contracts was made after the contract was signed, and the Municipality in the process to finalize the validation for the other two (2). Also, we found that the Municipality did not include all contract provisions required for non-federal entity contracts under federal awards for one (1) of the four (4) contracts. CRITERIA: Pursuant to 31 CFR section 19.300, 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 by (a) checking the EPLS; or collecting a certification from the entity; or adding a contract provision. 2 CFR section 200.327 references Appendix II to Part 200, which establishes contract provisions that must be included in non-federal entity contracts under federal awards. According to 2 CFR section 200.327, Appendix II to Part 200, (h), a contract must not be awarded to parties listed on the government exclusions in the System for Award Management (SAM), in accordance with OMB guidelines at 2 CFR 180 that implement Executive 12549 and 12689. The SAM Exclusions contain the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties found ineligible under any legal or regulatory authority other than Executive Order 12549. CAUSE:There is lack of knowledge about the contract provisions required to be included in federal awards contracts and the procedure to verify if the contractors are excluded in the System for Award Management (SAM). Therefore, the Municipality has been awarding contracts without the proper procurement procedure. EFFECT: The program is in noncompliance with the Procurement Suspension and Debarment requirements as established in 31 CFR section 19.300 and 2 CFR section 200.327. RECOMMENDATION: We recommend to the program administrators to include in the requisition for contracts a description of the requirements that need to be fulfilled to award a federal contract. In order to take into consideration a proposal or bid, the Municipality must have on hand the System for Award Management certification of the entity that indicates that the supplier is active and not listed in the governmentwide exclusion list. Contracts should not be signed without the proper documentation of the SAM.gov certification and payments should not be made without the required contract provisions. QUESTIONED COST: None PRIOR YEAR FINDING: None VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION: We concur with the auditor?s finding. We are going to prepare written policies and procedures in accordance with Uniform Guidance. Implementation Date: May 31, 2023 Responsible Person: Kristian Rivera Santiago Finance Director