Finding 479430 (2023-004)

2023 – 004 Procurement Federal Agency: U.S. Department of Agriculture Federal Program Name: Water and Waste Disposal Systems for Rural Communities Assistance Listing Number: 10.760 Federal Award Identification Number and Year: CPAP1186083 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: September 1, 2022 – December 31, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR Section 320.318(i) requires the District to maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. CFR 200.320(c) states that noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Condition: The City did not maintain documentation of the justification for the noncompetitive procurement and that it was done in accordance with Uniform Guidance requirements. Questioned costs: None Context: The City entered into one noncompetitive proposal during the course of the grant and did not maintain documentation of the consideration of the procurement method. Cause: The City does not receive frequent federal awards and was unfamiliar with the documentation requirements surrounding procurement procedures. Effect: Procurement practices may not be in compliance with the Uniform Guidance. Repeat Finding: No Recommendation: City personnel should familiarize themselves with the documentation requirements required by the CFR related to procurement. In addition, City policies and procedures should be modified to ensure documentation is maintained on the justification for any noncompetitive procurement transactions that are entered into and that the justification is reviewed and approved by someone other than the one making that determination. Views of responsible officials: There is no disagreement with the audit finding.