Finding 44472 (2022-003)

Material Weakness
Requirement
ABI
Questioned Costs
-
Year
2022
Accepted
2023-05-14
Audit: 51804
Organization: City of Fennville, Michigan (MI)

AI Summary

  • Core Issue: The City lacks written policies to ensure compliance with federal eligibility requirements for parties involved in federal assistance programs.
  • Impacted Requirements: This finding relates to the Uniform Grant Guidance, specifically 2 CFR 200.214 and 2 CFR part 180 regarding suspension and debarment.
  • Recommended Follow-Up: The City should adopt and implement written policies and procedures to verify the eligibility of all parties in future contracts.

Finding Text

2022-003 - Written Policies Required by the Uniform Grant Guidance Finding Type: Material Weakness over Federal Awards Programs: Capitalization Grants for Clean Water Revolving Funds (Assistance Listing Number 66.458) Criteria: Per 2 CFR ? 200.214 Suspension and debarment: Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition/Finding: The City had no controls in place, as required by the Uniform Guidance, to ensure that all parties that the City enters into covered transactions with are eligible for participation in federal assistance programs or activities. However, during our testing, we found that all covered transactions entered into by the City were with eligible parties. Cause: The City did not have written policies and procedures over procurement, including suspension and debarment, as required by the Uniform Guidance. Effect: As a result of this condition, the City had increased risk of inadvertently entering into a covered transaction with an ineligible party. Questioned Costs: No costs have been questioned as a result of this finding. Repeat Finding: No Recommendation: We recommend that the City Commission and management adopt, and follow, written policies and procedures (that conform with requirements of the Uniform Guidance) to ensure that future contracts are properly documented and awarded in a manner that documents that the City verified all parties under covered transactions are eligible for participation in federal programs or activities. View of Responsible Officials (Corrective Action): See corrective action plan.

Corrective Action Plan

Finding Number: 2022-003 Condition: The City had no controls in place, as required by the Uniform Guidance, to ensure that all parties that the City enters into covered transactions with are eligible for participation in federal assistance programs or activities. However, during our testing, we found that all covered transactions entered into by the City were with eligible parties. Planned Corrective Action: The City has adopted a procurement policy on 10/03/22, which states that the City will only hire contractors which are eligible for participation in federal assistance programs or activities. Contact person responsible for corrective action: Kathryn Beemer, City Administrator Email: kbeemer@fennville.com Office Phone: 269-561-8321 Cell Phone: 269-543-2645 Anticipated Completion Date: 10/03/2023

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 43436 2022-001
    Material Weakness
  • 44471 2022-002
    Material Weakness
  • 44473 2022-004
    -
  • 619878 2022-001
    Material Weakness
  • 620913 2022-002
    Material Weakness
  • 620914 2022-003
    Material Weakness
  • 620915 2022-004
    -

Programs in Audit

ALN Program Name Expenditures
66.458 Capitalization Grants for Clean Water State Revolving Funds $1.75M
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $679,014