Finding 561268 (2024-001)

Significant Deficiency
Requirement
I
Questioned Costs
-
Year
2024
Accepted
2025-05-22

AI Summary

  • Core Issue: The Cooperative failed to verify that vendors in covered transactions were not suspended or debarred, risking non-compliance with federal regulations.
  • Impacted Requirements: Compliance with suspension and debarment rules under 2 CFR 180 is essential for federal assistance programs.
  • Recommended Follow-Up: Implement internal controls to verify vendor eligibility before transactions, and maintain documentation to ensure ongoing compliance.

Finding Text

Assistance Listing Number 21.029 COVID-19 Coronavirus Capital Projects Fund U.S. Department of the Treasury Missouri Department of Economic Development Program Year 2024 Criteria – Suspension and debarment (2 CFR 180) Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended, debarred or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – The Cooperative was unable to provide evidence that vendors used in covered transactions were not suspended, debarred, or otherwise excluded. Cause – The Cooperative’s policies and procedures were not adequate to ensure compliance with suspension and debarment requirements under the Uniform Guidance. Effect or Potential Effect – The Cooperative may enter into covered transactions with vendors who have become suspended, debarred or otherwise excluded. Questioned costs - None Context – The Cooperative was unable to provide evidence covered transactions were not with vendors suspended, debarred or otherwise excluded. Recommendation – We recommend management design and implement internal controls to verify prior to toe entering into covered transaction that potential vendors are not suspension, debarment or otherwise excluded. Management's Response – Management acknowledges the audit finding related to suspension and debarment compliance under the Missouri ARPA Broadband Infrastructure Grant Program. Management is committed to implementing corrective measures to address the identified deficiencies and ensure full compliance with 31 CFR 19 subpart C. 1. Established & Implemented Suspension & Debarment Verification Procedures: o All current and new vendors will be verified using the Excluded Parties List System found on Sam.gov. and documentation will be kept in the company’s internal accounting file. This process was implemented in April 2025 and is ongoing. 2. Monitoring: o The Accounting team conducts annual self-assessments to ensure vendor eligibility documentation is current and up to date. Any vendors that are suspended, debarred, or otherwise excluded from federal assistance programs are reported to the Executive team to ensure compliance. We believe that these actions will significantly mitigate the risks associated with the identified conditions and strengthen our internal control environment and align our procurement practices with federal regulations.

Corrective Action Plan

Corrective Action Plan Assistance Listing Number 21.029 COVID-19 Coronavirus Capital Projects Fund U.S. Department of the Treasury Missouri Department of Economic Development Program Year 2024 Condition – The Cooperative was unable to provide evidence that vendors used in covered transactions were not suspended, debarred, or otherwise excluded. Due to the current year finding, management set a goal to ensure the Missouri ARPA Broadband Infrastructure Grant Program guidelines related to debarred or suspended vendors are being met. To meet these guidelines management has compared the current vendor list to Excluded Parties List System found on SAM.GOV and found none of the currently used vendors on the list. Management has added this verification step to its new vendor process and will conduct annual self-assessment to ensure vendor eligibility documentation is current and up to date. Responsible Official: Jay Wallace, Manager of Accounting & Finance Implementation Date: April 25, 2025

Categories

Procurement, Suspension & Debarment Subrecipient Monitoring Eligibility

Other Findings in this Audit

  • 1137710 2024-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.029 Covid-19 Coronavirus Capital Projects Fund $9.45M
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $712,574