Finding Text
2024-001
Federal Agency: U.S. Department of Treasury
Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds
Assistance Listing Number: 21.027
Federal Award Identification
Number and Year: None
Pass-Through Agency: Maryland State Department of Education
Pass-Through Number: 211837-01
Award Period: 3/3/2021 – 12/31/2024
Type of Finding: Significant Deficiency in Internal Control over
Compliance, Other Matters
Criteria or Specific Requirement:
Compliance: Non-federal entities are prohibited from contracting with or making subawards under
covered transactions to parties that are suspended or debarred. “Covered transactions” include
contracts for goods and services awarded under a non-procurement transaction (e.g., grant or
cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as
specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through
entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered
transactions, unless they are exempt as provided in 2 CFR section 180.215.
2 CFR 180.300 states that an entity may determine suspension and debarment status by:
(a) Checking SAM (System for Award Management) Exclusions; or
(b) Collecting a certification from that person; or
(c) Adding a clause or condition to the covered transaction with that person.
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:
For one of five vendors selected for testing, the Board was unable to provide documentation that it had
verified the suspension and debarment status before entering into covered transactions with the
vendor.
Questioned Costs:
There are no questioned costs related to this finding as the vendor was not federally suspended or
debarred.
Cause:
The Board’s procedures and internal controls over suspension and debarment are not sufficient to
ensure that all vendors’ suspension and debarment status was verified timely.
Effect:
Failure to verify the suspension and debarment status of vendors may result in the procurement of
goods or services from vendors that are suspended or debarred and result in unallowable expenditures
charged to the program.
Repeat Finding: No
Recommendation:
We recommend that the Board review its policies and procedures to ensure they include the three
options for determining suspension and debarment status listed in 2 CFR 180.300 and that controls are
sufficient to ensure that the suspension and debarment status is verified for all vendors prior to entering
into covered transactions.
Views of responsible officials:
There is no disagreement with the finding.