Finding 576869 (2022-001)

2022 - 001 – PROCUREMENT AND SUSPENSION AND DEBARMENT Federal Transit Administration Formula Grants Assistance Listing No. 20.507 U.S. Department of Transportation Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred or whose principals are suspended or debarred. Covered transactions include procurement contracts for goods or services that are expected to equal or exceed $25,000 and all non-procurement transactions (e.g., subawards to subrecipients). Condition and Context We performed testwork on 40 vendors and noted that for one out of 40 vendors tested, there was no Suspension & Debarment certification in the files or any evidence that a review had been performed to verify that the vendor or the vendor’s principals had not been suspended or debarred. Upon discussion with MTA, they obtained the required signed certifications from the vendor prior to the issuance of the fiscal year 2022 audit report. Questioned Costs The cost associated with the one item selected for testing was for one month’s lease payment of $11,333. MTA paid this vendor every month during fiscal year 2022; therefore, the total questioned cost for the fiscal year totaled $135,996. Cause The amounts paid to the vendor in question were related to a land lease. MTA was unaware that payments for a land lease fell under the federal suspension and debarment requirements. Effect MTA may have entered into an agreement with a vendor that has been suspended or debarred. Recommendation We recommend that MTA ensure compliance with this regulation as it relates to federal programs for all vendors and should include a requirement that suspension/debarment certifications be obtained and placed in all contract files for all vendors regardless of the type of goods or services provided. Views of Responsible Officials and Planned Corrective Actions See management’s corrective action plan.