Finding Text
Assistance Listing, Federal Agency, and Program Name - ALN 21.027, U.S. Department of Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF)
Federal Award Identification Number and Year - Direct Grant - Not available, Pass through grant - SLFRP0127 (2024)
Pass through Entity - Michigan Department of Environment, Great Lakes, and Energy
Finding Type - Material weakness and material noncompliance with laws and regulations
Repeat Finding - No
Criteria - The Township should ensure there is a process in place, prior to entering into contracts with vendors that will be paid with federal dollars, to verify that such vendors are not suspended, debarred, or otherwise excluded by 1) checking sam.gov exclusions, 2) collecting a certification from that person, or 3) adding a clause or condition to the covered transaction with that person, pursuant to 2 CFR Section 180.300 and to retain evidence of such review.
Condition - The Township did not retain documentation as evidence to show that they performed a check for whether a contractor was suspended or debarred before entering into a contract, nor did they obtain a certification from the contractor.
Questioned Costs - None
If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A
Identification of How Questioned Costs Were Computed - Not applicable
Context - The Township had six contractors with which the Township had active contracts using Coronavirus State and Local Fiscal Recovery Fund funding that were required to be verified to ensure that they were not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300. We selected two contracts for testing, and one lacked verification or certification from contractor. However, once Plante & Moran, PLLC identified this issue, the Township performed procedures to ensure contractors were not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300, thereby creating no questioned costs.
Cause and Effect - The Township did not have a control in place to ensure retention of documentation that would prove that verification of any contractor with which it plans to enter into a contract using Coronavirus State and Local Fiscal Recovery Fund is not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300. The Township could have entered into a contract with vendors that were suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300. Upon verifying the contractors were not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300 after the contracts were in place, no questioned costs were present.
Recommendation - We recommend that controls be implemented to ensure the verification of whether contractors are suspended or debarred is performed before entering into a contract and retain documentation as evidence of the search.
Views of Responsible Officials and Corrective Action Plan - The Township will develop and implement a formal written policy and procedure to ensure compliance with 2 CFR §180.300. This procedure will require verification of a contractor’s status via the System for Award Management (SAM.gov) prior to the execution of any contract funded with CSLFRF dollars. The Township will also maintain printed or electronic documentation of the verification results in the contract file. Staff involved in procurement will be trained on this requirement to ensure consistent application.