Finding Text
USDA Rural Development - Water and Waste Disposal Loans, Loan Guarantees, and Grants ALN 10.770 Federal Award Year 2022 - Material Weakness In Controls Over Compliance - Failure to obtain contracts for sub-contractors of the primary sub-contractor agreeing to American Iron and Steel Act (AIS) and other compliance requirements and failure to obtain documentation for quantities of AIS compliant materials for some iron and steel products. Criteria: This program requires compliance with the AIS. Condition - Some of the manufacturer certifications for material subject to the AIS did not show the quantites or place of delivery. In addition, sub-contractors of the primary sub-contractor, did not sign contracts assuring their agreement with these requirements. It does not appear that any of these sub-contractors provided any material. In fact, they were generally individual "contractual workers". Questioned costs - None. Repeat finding - No. Cause: Adequate documentation of AIS compliance, apparently, was not obtained prior to approving payments. Sub-sub-contracts and missing quantities were ignored. Recomendation: The District should insist that contracts are obtained from all sub-contractors (including workers the contractor or sub-contractor pay on a contractual basis). All contractors should agree to comply with AIS provisions of the original contract. Verification of delivery of quanties of Iron and Steel products should be obtained and reviewed prior to approving partial pay estimates.