Finding Text
Federal Transit Cluster – Procurement and Suspension and Debarment
Noncompliance and Significant Deficiency in Internal Control
ALN 20.507 and 20.526
U.S. Department of Transportation – Federal Transit Administration
Criteria: Per 2 CFR § 200.318(i), non-Federal entities must maintain records sufficient to detail the history of a procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Additionally, 2 CFR Part 180 requires that contracts be awarded only to responsible contractors. Verification of responsibility includes checking the System for Award Management (SAM.gov) or obtaining certifications. Under Appendix II to 2 CFR Part 200, contracts made under federal awards must include specific provisions, including those related to termination, lobbying, and Buy America certifications, where applicable.
Condition: In its procurement files, the Authority’s had missing documentation of procurement history, absence of required contract clauses, lack of evidence of contractor responsibility determination and missing lobbying and Buy America certifications.
Cause: The Authority did not have adequate internal controls in place to ensure compliance with federal procurement requirements, including documentation, contractor responsibility verification, and inclusion of required contract clauses and certifications.
Effect: The absence of required documentation, verifications, and certifications opened the Authority to increased risk of noncompliance with federal procurement standards, potential ineligibility of costs, and exposure to audit disallowances or grant repayment.
Questioned Costs: None identified.
Context: For one out of ten transactions tested exceeding the micro-purchase threshold, the Authority failed to maintain a complete record of the procurement history and its determination on the status of the contractor responsibility and was missing required clauses and certifications in the contract details.
Recommendation: We recommend that the Authority implement comprehensive internal control procedures over procurement to ensure compliance with federal requirements. This should include maintaining complete procurement documentation, verifying contractor responsibility through
SAM.gov or equivalent, including all required federal clauses and certifications in solicitations and contracts, and providing adequate training to procurement staff on federal requirements and documentation standards.
Views of Responsible Officials: See Corrective Action Plan