Finding 481390 (2023-002)

Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Cluster Assistance Listing Number: 20.205 Federal Award Identification Number and Year: 395-0096-22-21 / 395-0096-22-22 -Year Ended December 31, 2023 Award Period: January 1, 2023 – December 31, 2023 - Significant Deficiency in Internal Control over Compliance - Other Matters Criteria or specific requirement: Section 200.303, Internal Controls, states that the Commission shall “establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: The Commission had not established a policy or an effective internal control system related to the grant agreement and the Procurement, Suspension, and Debarment compliance requirement. The Commission’s current procurement policy does not include a documented process to ensure vendors meet suspension and debarment requirements. In addition, there was no documentation that the Commission had timely verified that the Commission’s vendors were not suspended or debarred. Questioned costs: None Context: Procurement policies were followed, but no documented process to ensure suspension and debarment compliance was noted. Cause: The current policy and internal control structure does not include a process for ensuring suspension and debarment requirements are met for all required vendors. Effect: The Commission may contract with or make subawards under covered transactions to parties that are suspended or debarred. Repeat Finding: No Recommendation: We recommend that the Commission update their current procurement policy and implement a system of internal controls over suspension and debarment that will ensure compliance. Views of responsible officials: Management agrees with the finding.