Finding Text
2024-002 Procurement and Suspension and Debarment
Program: Coronavirus State and Local Fiscal Recovery Funds – Assistance Listing Number 21.027, U.S. Department of Treasury passed through the City of New Orleans, Louisiana
Compliance Requirement: Procurement and Suspension and Debarment
Criteria: Non-federal entities are prohibited from contracting with 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. When a non-federal entity enters into a covered transaction, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) receiving a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300).
In addition, under 2 CFR 200.326, Contract Provisions, a non-federal entity’s contracts, must contain the applicable provisions described in Appendix II to Part 200, Title 2 - Contract Provisions for non-Federal Entity Contracts under Federal Awards.
Condition: During our testing of compliance with the suspension and debarment regulations, the Office was unable to provide documentation of its determination during the procurement process that the 2 of the 3 vendors selected for testing were not suspended or debarred. Based on our review of SAM.gov, these vendors were not suspended or debarred. In addition, for 2 of the 3 contracts selected for testing, the required provisions described in Appendix II to Part 200 - Contract Provisions for non-Federal Entity Contracts under Federal Awards were not included. The universe (population) from which the vendors and contracts were selected were all contracts over $25,000 with expenditures incurred during 2024 consisting of 4 contracts.
Questioned Costs: None
Cause: Management did not maintain documentation of the Office’s determination of whether vendors were suspended or debarred for all covered transactions.
Effect: Without ensuring documentation is maintained over whether a vendor is suspended or debarred, the Office may enter into contracts with suspended or debarred parties.
Recommendation: We recommend that the Office review all contracts to ensure the appropriate language exits regarding suspension and debarment regulations, and the Office should consider an annual review of SAM.gov for all vendors that are paid from federal awards. In addition, the Office should implement procedures to ensure that contracts paid with federal funds have the provision as required by Appendix II to Part 200, Title 2 - Contract Provisions for non-Federal Entity Contracts under Federal Awards.
Views of responsible
officials and planned
corrective action: OPSO acknowledges the finding and appreciates the importance of maintaining documented verification of vendor eligibility and ensuring all federally required provisions are present in contracts funded by federal awards. We would like to clarify that the two vendors in question were not suspended or debarred according to SAM.gov records at the time of the audit. However, OPSO did not retain adequate documentation of the verification performed at the time of procurement, nor did we fully integrate all Appendix II provisions in the contract files reviewed. This deficiency did not result from intentional noncompliance but from gaps in procedural oversight and documentation retention stemming from historical procurement practices and limited internal controls over contract file completeness.
Corrective Action Plan
To address the finding and ensure full future compliance with 2 CFR § 180.300, § 200.326, and related guidance, OPSO has implemented the following corrective actions:
1. Contract File Documentation Protocol - Effective July 1, 2025, all procurement files for federal contracts exceeding $25,000 must include:
• A printed or digitally archived screenshot of the SAM.gov record showing the vendor’s exclusion status.
• A signed vendor eligibility certification form confirming the entity is not suspended, debarred, or otherwise excluded.
• A signed checklist confirming inclusion of required Appendix II contract provisions.
All contract files will be centrally stored and monitored by OPSO’s Procurement Division.
2. Updated Procurement Templates - OPSO has updated all procurement and contracting templates to:
• Include the full list of required provisions from Appendix II to Part 200.
• Add a standard Suspension and Debarment certification clause.
• Automatically require review of the SAM.gov Exclusions List prior to final contract execution.
3. Staff Training and Compliance Oversight - All staff involved in procurement and grant-funded contracting were trained on federal procurement standards and suspension and debarment requirements on December 31, 2025. Refresher trainings will occur semi-annually and be required for new staff during onboarding. A pre-award compliance checklist has been instituted to ensure proper documentation and verification steps are followed and archived.
4. Post-Award Compliance Reviews - Beginning Q4 of Fiscal Year 2025, OPSO’s Internal Audit and Compliance Division will conduct quarterly reviews of all federal contract files to ensure:
• Proper documentation of vendor eligibility.
• Compliance with contract content requirements under 2 CFR Part 200.
Findings will be reported directly to the Chief Financial Officer and Sheriff for corrective follow-up if deficiencies are found.
Conclusion: OPSO remains fully committed to upholding all federal procurement and grant compliance standards. While this finding did not result in questioned costs, we recognize the risk it poses and have taken decisive action to enhance internal controls, training, and documentation standards. We appreciate the audit team’s diligence and remain available to provide any further documentation or clarification needed.