Finding Text
2024-004 COMPLIANCE AND INTERNAL CONTROL OVER PROCUREMENT – ARPA Assistance Listing: 21.027 Coronavirus State and Local Fiscal Recovery Funds
Criteria: The American Rescue Plan Act (ARPA) provided significant funding to state, local, and tribal governments to address the public health and economic impacts of the COVID-19 pandemic. These funds are subject to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200), which include the specific standards under Public Bid Law.
Condition: For the year ended December 31, 2024, twelve vendors with expenditures totaling $ 2,179,730 were selected for testing. We noted for one of the vendors selected for testing, the City was unable to provide any contract or bid support for the project, which incurred $434,190 of expenditures during the year.
Universe/Population: The total population for procurement considerations was all vendors of the American Rescue Plan Act whose transactions for the year ended December 31, 2024, exceeded the micro-purchase threshold of $10,000. Payroll and benefit-related transactions were excluded from the population. Based on these requirements, the population consisted of twenty-three vendors totaling $2,790,345.
Sample size : A sample of 12 vendors were selected for testing based on those with total expenditures over $10,000 during the fiscal year.
Cause: The City did not adhere to compliance with Uniform Guidance Federal regulations per 2 CFR section 200.320 and its established procurement policy. The City did not maintain appropriate records needed to evidence compliance with Bid Law requirements.
Effect: The City may enter into contracts with vendors that do not provide the best possible price when using public funds.
Questioned Costs: For the purposes of this finding, there were no questioned costs.
Recommendation: The City should strengthen controls to ensure appropriate consideration to competitors is given and adequate documentation is maintained with respect to procurement in accordance with federal Uniform Guidance requirements.
Management’s response: The City concurs with the finding described above.