Finding 485011 (2023-005)

Finding Number: 2023-005 Prior Year Finding: 2022-005 Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 – Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2022 – 6/30/2023) Compliance Requirement: Suspension and Debarment Type of Finding Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: Control – Per 2 CFR section 200.303(a), a non-Federal entity must: 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 comply with the 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). Condition/Context: The Town did not determine the suspension and debarment status of four out of five vendors tested with expenditures exceeding $25,000 as required by federal regulations. Questioned Costs: There are no questioned costs related to this finding as the vendor was not federally suspended or debarred. Cause: The Town’s internal controls were not sufficient to ensure federal suspension and debarment regulations were followed for purchases made for the program. Effect: Failure to adhere to suspension and debarment requirements may result in the Town entering into a contract or purchase with a vendor that is suspended or debarred and not authorized to provide goods and services to the program. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-05. Recommendation: We recommend that the Town enhance its procedures and internal controls to ensure that it verifies vendors are not suspended or debarred from business prior to all goods and services charged to the program. The Town should retain documentation of procurement suspension/debarment status verifications for its vendors audit purposes. Views of Responsible Officials: Management agrees with the finding.