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.