Finding 577071 (2022-006)

Finding 2022-006 Procurement, Suspension, and Debarment - Material Weakness in Internal Control and Material Noncompliance Agency U.S. Department of Treasury Pass-through Entity State of Alaska Department of Commerce, Community, and Economic Development Program ALN: No. 21.027 Coronavirus State and Local Fiscal Recovery Funds – COVID-19 Award No. AK0137 Award Year 2022 Criteria or Specific Requirement Internal control policies should be established to document that an entity with which the City plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded for covered transactions under the Uniform Guidance. Condition The City did not retain documentation that vendors were not debarred, suspended, or otherwise disbarred. Cause During FY22, the City did not have internal control policies in place to ensure that adequate documentation was maintained over vendors with which the City entered into covered transactions. Effect or potential effect The lack of documentation can impede the City’s management to monitor compliance with the requirement. Questioned Costs None. Context Auditor were unable to verify internal controls over sampled procurements because no documentation was retained. Auditor verified that the vendor was not suspended or disbarred. Recommendation We recommend that management retain evidence of review that prospective vendors and suppliers are not on the suspension and debarment list for covered transactions under Uniform Guidance. Views of responsible officials and planned corrective actions Management agrees with the finding. Management will retain evidence of review that prospective vendors and suppliers are not on the suspension and debarment list for covered transactions under Uniform Guidance.