Finding Text
Criteria or Specific Requirement: Grant recipients must comply with Uniform Guidance for procurement, specifically with 2 CFR sections 200.318 thru 200.327 including ensuring the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 DFR section 200.320. Condition: The City did not comply with 2 CFR 200.320 or with City procurement policies. The City did not obtain quotes for a project for upgrades to the financial system for the purpose of grants accounting and management. Cause: The City began the system upgrade project in a prior year using 21.019 CARES CRF funding. Under that grant program, procurement standards were not applicable under Uniform Guidance. Those funds were set to expire December 2021. Therefore, management concluded that since those expenditures were also allowable under 21.027, they would complete the project using funds from the Coronavirus State and Local Fiscal Recover Funds grant (Assistance Listing (AL)21.027). However, under the AL 21.027 grant, the City is required to follow the Uniform Guidance for procurement of contracts. Effect: The City is out of compliance with procurement requirements. Questioned Costs: None. Context: A small purchase could have been applied as the total amount spent under the contract was more than the micro-purchase amount but less than the simplified acquisition threshold. Under small purchase procedures price or rate quotes must be obtained. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that management establish and maintain effective internal control ensuring an understanding of compliance requirements prior to entering into contracts with vendors with intention of using of grant monies. Management Response: See Corrective Action Plan.