Finding Text
Programs Affected: AL 66.458 – Clean Water State Revolving Fund – Award Year 2022/2023
Criteria: 2 CFR 180.300 details the requirement when, “entering a covered transaction with another person at the next lower tier, they must verify that the person with whom they intend to do business is not excluded or disqualified. This is done by (a) checking SAM exclusions; or (b) collecting a certification from that person; or (c) adding a clause or condition to the covered transaction with that person.”
Condition: BerryDunn was unable to test for compliance with the requirements of 2 CFR 180.300 for verifying a vendor is not excluded or disqualified from doing business with an entity that receives federal funds, as there was no auditable evidence of the contractors being verified for exclusion through suspension or debarment.
Cause: Vernon Homes currently lacks a formal policy to review vendors against the SAM exclusion list, collecting a formal certification from the vendor or adding a clause to the covered transaction with the vendor.
Questioned Costs: None.
Effect: Without a formal policy addressing the process of suspension and debarment check, there is risk of working with a suspended or debarred entity resulting in non-prudent use of federal funds.
Recommendation: BerryDunn implementing a formal process when entering arrangements with external parties to check they are not suspended or debarred on the SAM Exclusions list.
Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See attached Corrective Action Plan.