Finding 42857 (2022-001)

2022-001 Suspension and Debarment Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds Criteria: Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations ? 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000. Condition: For two covered transactions tested, the verification for suspension or debarred vendors was not performed before entering into the covered transactions. Questioned Costs: None. Context: The County entered into a total of nine covered transactions over the $25,000 threshold for this grant. For the two vendors that were not verified, total expenditures with them for this grant during 2022 were $2,092,821 and $828,461. In addition, after this was brought to the County?s attention, the County verified that these vendors were not suspended or debarred. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Failure to verify vendors are not suspended or debarred may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services to the grant. Cause: The County has procedures in place to perform verification and retain documentation, but not all department heads are aware of the procedures or federal requirements. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering into a covered transaction. In addition, consideration should be given to providing additional training to department heads to ensure staff are aware of federal requirements and County procedures. View of Responsible Official: Concur