Finding 571776 (2024-007)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2024
Accepted
2025-07-22
Audit: 362784
Organization: City of Commerce (CA)

AI Summary

  • Core Issue: The City failed to verify that vendors were not suspended or debarred before awarding contracts, violating federal requirements.
  • Impacted Requirements: Compliance with Uniform Guidance for federal funds, including proper documentation and maintenance of procurement contracts.
  • Recommended Follow-Up: Update purchasing policies and procedures to ensure compliance and improve documentation practices for vendor checks.

Finding Text

Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with Uniform Guidance, recipients of federal funds must ensure that contractors and subcontractors receiving federal funds are not suspended, debarred, or otherwise excluded from participating in federally funded projects. This verification must be conducted prior to awarding a contract and may be fulfilled by reviewing the System for Award Management (“SAM”) database or obtaining a vendor certification. Proper documentation of this verification process must be retained as evidence of compliance. Additionally, all procurement contracts must be maintained in an up-to-date and legally valid form to ensure enforceability and compliance with federal requirements. Condition: During the audit over suspension and debarment, we noted all six Federal Transit Cluster vendors selected for testing, did not have documentation proof of a suspension and debarment verification check through the SAM database. Cause: Control activities and monitoring controls are inadequate to follow the City’s adopted Federal Transit Procurement Policy. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract being awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects and incurring potentially disallowed costs. Furthermore, the continued use of an expired contract exposes the City to legal risks, including the inability to enforce contract terms or resolve disputes. Questioned Costs: None noted. Context: See condition above for the context of the procurement finding. Identification as a Repeat Finding, If Applicable: Repeat Finding from 2023-005. Recommendation: We recommended the City update its purchasing policies and related procedures and to follow the new policies and procedures to be in compliance with Uniform Guidance related to procurement, suspension and debarment and improve its documentation on RFQ evaluation and suspension and debarment check. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 571761 2024-005
    Significant Deficiency
  • 571762 2024-005
    Significant Deficiency
  • 571763 2024-005
    Significant Deficiency
  • 571764 2024-005
    Significant Deficiency
  • 571765 2024-005
    Significant Deficiency
  • 571766 2024-006
    Material Weakness
  • 571767 2024-006
    Material Weakness
  • 571768 2024-006
    Material Weakness
  • 571769 2024-006
    Material Weakness
  • 571770 2024-006
    Material Weakness
  • 571771 2024-006
    Material Weakness
  • 571772 2024-007
    Material Weakness Repeat
  • 571773 2024-007
    Material Weakness Repeat
  • 571774 2024-007
    Material Weakness Repeat
  • 571775 2024-007
    Material Weakness Repeat
  • 571777 2024-007
    Material Weakness Repeat
  • 1148203 2024-005
    Significant Deficiency
  • 1148204 2024-005
    Significant Deficiency
  • 1148205 2024-005
    Significant Deficiency
  • 1148206 2024-005
    Significant Deficiency
  • 1148207 2024-005
    Significant Deficiency
  • 1148208 2024-006
    Material Weakness
  • 1148209 2024-006
    Material Weakness
  • 1148210 2024-006
    Material Weakness
  • 1148211 2024-006
    Material Weakness
  • 1148212 2024-006
    Material Weakness
  • 1148213 2024-006
    Material Weakness
  • 1148214 2024-007
    Material Weakness Repeat
  • 1148215 2024-007
    Material Weakness Repeat
  • 1148216 2024-007
    Material Weakness Repeat
  • 1148217 2024-007
    Material Weakness Repeat
  • 1148218 2024-007
    Material Weakness Repeat
  • 1148219 2024-007
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
16.710 Public Safety Partnership and Community Policing Grants $185,710
14.218 Community Development Block Grants/entitlement Grants $156,930
20.507 Federal Transit Formula Grants $66,060