Finding Text
Finding Number: 2022‐002
Repeat Finding: Yes, 2021‐002
Federal Program Name/Assistance Listing Title: COVID‐19 Federal Transit Cluster
Federal Assistance Listing Number: 20.507
Federal Agency: U.S. Department of Transportation
Federal Award Number: N/A
Federal Pass‐Through Agency: N/A
State Program Name: State Urbanized Area Formula Program, State Formula Grants For Rural Areas
State Agency: Texas Department of Transportation
Questioned Costs: N/A
Type of Finding: Noncompliance, Material Weakness
Compliance Requirement: Procurement, Suspension and Debarment
Criteria
Non‐federal entities other than states, including those operating federal programs as subrecipients
of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. They
must use their own documented procurement procedures, which reflect applicable State and local
laws and regulations, provided that the procurements conform to applicable federal statutes and the
procurement requirements identified in 2 CFR part 200. Additionally, non‐federal entities are
prohibited from contracting with or making subawards under covered transactions to parties that are
suspended or debarred. When a non‐federal entity enters into a covered transaction with an entity
at a lower tier, the non‐federal entity must verify that the entity, as defined in 2 CFR §180.995 and
agency adopting regulations, is not suspended or debarred or otherwise excluded from participating
in the transaction. This verification may be accomplished by (1) checking the System of Award
Management (SAM) maintained by the General Services Administration (GSA) or (2) collecting a
certification from the entity, or (3) adding a clause or condition to the covered transaction with that
entity (2 CFR §180.300).
Condition
The Transit District did not meet the requirement to verify that covered transactions were only made
to an entity that was not suspended or debarred or otherwise excluded. Additionally, the Transit
District did not follow federal guidelines for purchases exceeding the small purchases threshold.
Cause
The Transit District’s internal controls over procurement of goods and services were not adequate.
Effect
The Transit District was not in compliance with Federal regulations and guidelines related to
suspension and debarment or procurement.
Context
The sample was not intended to be, and was not, a statistically valid sample. During our review of
purchasing, we noted the following:
- For seven procurements over $25,000 reviewed, documentation demonstrating a vendor check
for suspension and debarment was not retained.
- For five vendors reviewed with total expenditures below the Simplified Acquisition threshold,
no documentation of quotes was maintained.
- For three vendors reviewed with total expenditures that exceeded the Simplified Acquisition
threshold, no documentation of a sealed procurement issued in accordance with federal
guidelines was maintained.
Recommendation
The Transit District should maintain documentation of procurement actions in the vendor file
including sealed procurements issued, quotes and suspension and debarment checks. Review of
procurement compliance should occur before the Transit District’s funds are obligated.
Views of Responsible Officials
See Corrective Action Plan.