Finding 571824 (2024-001)

2024-001 Suspension and Debarment Federal Agency: U.S. Department of Treasury Federal Program Name: Highway Planning and Construction Cluster Assistance Listing Number: 20.205 Federal Award Identification Number and Year: N/A Award Period: 2024 Pass-through Entity: AP-5577 (638) Questioned Cost:s None Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Some federal programs are subject to suspension and debarment requirements, which are designed to ensure that federal funds are not awarded to individuals or entities that have a history of noncompliance with federal regulations or that pose a risk to the integrity of federal programs. The suspension and debarment regulations require recipients of federal funding to ensure contractors and subrecipients are not suspended or debarred by the federal government prior to executing a contract. Condition: The City did not have a formal process implemented to perform suspension and debarment assessments for all new contracts funded by federal awards. Going forward the City will perform suspension and debarment assessments for all new contracts. Context: Procurement was direct and material to the Highway Planning and Construction Cluster. There were two contractors subject to the suspension and debarment requirements. One of the contracts did not have supporting documentation to evidence a suspension and debarment assessment was performed prior to awarding the contract. Cause: The City did not have a process to perform suspension and debarment assessments outlined in 2 CFR sections 416.1(a), 416.1(b) and 417.215(a)(1) and in 7 CFR section 210.21(g), 215.14a(e), 220.16(f), and 225.17(e). Effect: Federal funding could be spent on organizations that are suspended or disbarred. Recommendation The City should design internal controls over procurement of federal awards to ensure suspension and debarment assessments are performed before a contract is awarded. Repeat Finding: No Views of Responsible Officials: There is no disagreement with the audit finding.