Finding Text
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 66.458, Environmental Protection Agency. Capitalization Grants for Clean Water State Revolving Funds
Federal Award Identification Number and Year: 5749-01, Loan Period 06/18/2022-11/15/2024
Pass-through Entity: Michigan Department of Environment, Great Lakes, and Energy Finance Division - Water Infrastructure Financing Section
Type: Material weakness in internal control and material noncompliance with laws and regulations
Repeat Finding: No
Criteria: A nonfederal entity must have adequate procedures in place to verify that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded (2 CFR sections 200.212 and 200.318(h); 2 CRF section 180.300; 48 CFR section 52.209-6).
Condition: During procurement testing of the Capitalization Grants for Clean Water Revolving Funds, we noted that the Township did not have documentation that sam.gov was reviewed to ensure the contractors were not suspended or debarred. The only consideration of debarment or suspension appears to be requirement to have contractors provide a signed certification to the effect of not being debarred or suspended from participation in federally funded projects.
Identification of How Likely Questioned Costs Were Computed: N/A
Known Questioned Costs: None. Subsequently, the sam.gov was reviewed to ensure that the contractors were not suspended or debarred.
Context: None of the four contractors utilized for the Capitalization Grants for Clean Water Revolving Funds project were evaluated. Cause/Effect: The lead engineer left the employment of the engineering company, and they believe that he would have tested for suspension or debarment at the time of initiating the contracts, however no documentation could be located. The Township did not have controls in place to comply with suspension and debarment evaluation requirements.
Recommendation: We recommend the Township implement adequate controls to ensure verification of debarment, suspension, or exclusion takes place before entering into covered transactions.
View of responsible officials and planned corrective action plan: See attached corrective action plan.