Finding Text
Criteria: In accordance with 2 CFR 200, management should have an adequate system of internal control procedures in place to ensure that applicants have all required documentation in their file. In accordance with 42 USC Section 802(c) and 803(c) and Treasury’s Interim Final Rule and Final Rule, recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance.
Condition: The Town’s internal controls over procurement are not functioning as intended.
Context: Of the 19 procurements during the current year valued at $2,799,733, we examined 4 (valued at $1,121,990) and determined that 4 (100% valued at $1,121,990) did not have documentation to verify that internal controls and compliance with procurement guidelines were being followed. The proper procurement documentation was not kept on file as required by procurement guidelines for use of COVID 19 – Coronavirus State and Local Fiscal Recovery funding.
Effect: Purchases may be made without the proper procurement procedures being followed.
Cause: Due to staff turnover at the Town, there were instances where proper procurement documentation was not kept on file.
Questioned Cost: In accordance with 2 CFR 200, auditors are required to report known questioned costs when likely questioned costs are greater than $25,000. The sample results identified $1,121,990 in known questioned costs.
Recommendation: The Town should have a system in place to ensure that the procurement policies are implemented and functioning as intended.
Views of Responsible Officials and Planned Corrective Actions: The Town agrees with this finding. Please refer to the Corrective Action Plan section of this report.