Finding Text
Assistance Listings number and name: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award number and year: SLFRP0665, March 3, 2021 through December 31, 2026 Federal agency: U.S. Department of the Treasury Compliance requirement: Procurement Questioned costs: $25,625 Condition?Contrary to federal regulations and County policies and procedures, the County inappropriately used sole source procurement for a contract paid for with federal program monies. Specifically, the Public Works Department, which initiated the sole source procurement, and the County?s former procurement officer who approved the sole source procurement inappropriately used a sole source procurement for a $25,625 contract for hauling dirt for the County Fair?s arena paid for with federal program monies, failing to ensure multiple sources for the service did not exist and to appropriately document the sole source justification in the contract file. This inappropriate sole source purchase comprised 3.6 percent of the program?s total federal award expenditures of $707,004 in fiscal year 2022. Effect?The County?s inappropriate use of a sole source procurement increased the County?s risk of not receiving the most advantageous price for the service purchased with federal monies. Therefore, the County may have inappropriately decreased federal program monies available for other program activities. The County is also at risk that this finding applies to other federal programs that it administers. Cause?The County?s current procurement officer reported that the former procurement officer is no longer employed with the County and, therefore, did not know why the County?s sole source procurement procedures were not followed, documented, and enforced. Criteria?Federal regulations permit noncompetitive purchases using federal program monies only in certain circumstances, such as when there is only a single source for purchasing goods/services, and require the County to establish and follow written policies and procedures that conform with the purchasing requirements of the federal Uniform Guidance (2 CFR ?200.318 and .320[c][2]). Further, County policies and procedures require sole source procurement to be avoided when possible and require the County procurement officer and departments to conduct a good-faith search for available sources and, if there is only one source for the goods or services being purchased, to document the determination for using sole source procurements prior to making such purchases and include it in the contract file (Gila County. [2019.] Procurement Policy, Section 8, Part C.). Also, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR ?200.303). Recommendations?The County should: 1. Require the Public Works Department and procurement officer to follow County policies and procedures for determining and documenting each sole source procurement only after conducting a good-faith search for available sources and concluding there is only a single source and include it in the contract file. 2. Annually, train all County employees with purchasing responsibilities, including the Public Works Department and procurement officer, on the County?s policies and procedures for determining and documenting sole source procurements. The County?s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.