Finding 567100 (2024-003)

2024-003 Suspension and Debarment Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Programs: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP0278; 2021 Pass-Through Agency: N/A - Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. Condition: For two of the four covered transactions tested, the County did not maintain documentation of verification that the vendors were not suspended or debarred prior to entering into the covered transactions. Questioned Costs: None. Context: The County entered into a total of 36 covered transactions during the year using COVID-19 – Coronavirus State and Local Fiscal Recovery Funds. The vendors tested that did not have documentation of verification prior to entering the transaction were not listed as suspended or debarred on SAM.gov at the time of the audit. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded prior to entering into a covered transaction may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services under the grant. Cause: The County informed us that, for one covered transaction, the County did not retain results of the suspension and debarment search, and, for one covered transaction, the County did not initially anticipate using federal funds to pay for the transaction. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Concur