Finding Text
Finding Reference: 2022-002 Federal Agency: U.S. Department of Treasury Pass-Through Agency: P.R. 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 in Internal Controls / Instance of Noncompliance (SD) & (NC) Condition: In our Procurement Contract Provision Test, we evaluated five (5) contracts related to three (3) suppliers. We found that the Municipality does not have evidence of registration in the System for Award Management (SAM) or appropriate documentation to support that they were neither debarred nor suspended prior to the award of federal funds. 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 does not complied with the Procurement Suspension and Debarment requirements as established in 31 CFR section 19.300 and 2 CFR section 200.327. Recommendation: The System for Award Management provides a dated certification including the results obtained for the specified contractor. This certification should be retained at each contractor?s file. The Municipality must certain that the certification is dated on or before the contractor?s agreement date or first payment. To comply with this requirement proper procedures, which take into consideration that a contractor has an active account in SAM system, need to be implement because the SAM system will provide reliable information if the contractor?s record is properly updated. Questioned Cost: None Prior Year Finding: No Views of Responsible Officials and Planned Corrective Action: We are going to prepare written policies and procedures in accordance with Uniform Guidance. Implementation Date: During Fiscal Year 2022-2023. Responsible Person: Belinda Alvarez Finance Director