Finding Text
2023-009 – Procurement, Small Purchase, and Suspension and Debarment (Material Weakness in
Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: COVID-19 Coronavirus State and Local Fiscal Recovery Funds, 21.027
Federal Awarding Agency: U.S. Department of the Treasury
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County did not apply the correct small purchase threshold for identifying purchases
that need to obtain quotes in their policy. Population $10k-$20k that is not included in the small
purchase policy included transactions totaling $18,000. The County does not review for suspension
and debarment prior to entering into a covered transaction. During our review of testwork, two (2)
out of two (2) transactions did not contain the required quotes obtained prior to purchase.
Criteria - Per 2 CFR 200.303(a), the 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 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).
Per 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the
micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must
be obtained.
Per 2 CFR 180.300, entering into a covered transaction you must verify that the business is not
excluded or disqualified by checking SAM exclusions, or collecting a certification form, or adding a
clause or condition to the covered transaction.
Cause - Policies not adequate to meet federal guidelines and need to be updated. The County was
unaware all vendors receiving federal funds needed to get checked for suspension and debarment.
Proper procurement method not utilized.
Questioned Costs – Questioned and likely costs of $18,000
Effect - The County may unintentionally use a higher cost vendor when failing to obtain price or rate
quotations for items over the micro-purchase threshold and may use a vendor that has been
suspended or debarred.
Auditor’s Recommendation - The auditor recommends that the procurement policy be updated to
comply with all relevant federal procurement requirements and reviewed for necessary revisions
regularly and train staff in the purchasing department on the requirements for all thresholds. In
addition the County needs to include a section on entering into covered transactions and train staff
in the purchasing department of the requirement to check for any suspension or debarment.
Views of Responsible Officials and Planned Corrective Action - Our Chief Procurement Officer has
been trained on entering into covered transactions and the requirement to check for any
suspension or debarment by vendors in SAM.gov. The County will also maintain quotations for
items over the micro-purchase threshold. This will be a documented process in the new policy and
procedures manual for federal guidelines.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance
Director
Timeline and Estimated Completion Date –No later than August 31, 2024.