Finding Text
Criteria or Specific Requirement
Suspension and Debarment – Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services that are expected to equal or exceed $25,000. When a non-federal entity enters into a covered transaction, the non-federal entity must verify that the entity or person is not suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity or person, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The non-federal entity must have internal controls designed and operating the ensure compliance with the suspension and debarment requirements.
Condition
Internal controls over entering into a transaction with a suspended or debarred party were not followed on an applicable purchase. Fremont County School District #1’s (“District”) management indicated that a search on SAM was performed; however, the SAM search results were not retained to document the compliance with the requirement.
Cause
The District’s grant personnel advised that the absence of SAM search documentation was missed during their review of the grant documentation.
Effect or Potential Effect
Without full compliance with the requirements for procurement, suspension and debarment, the District could be required to repay all amounts expended for these purchases.
Questioned Costs
None.
Context
The District had one transaction subject to the suspension and debarment compliance requirement. The District did not retain SAM search results to document compliance with verification that the contractor was not suspended or debarred prior to entering into the contract.
Identification of a Repeat Finding
No
Recommendation
We recommend the District review its policies and procedures to ensure compliance with suspension and debarment compliance requirement is documented. The District may consider collecting a certification from the entity or adding a clause or condition to the covered transaction with that entity. Additionally, the District may consider developing a checklist to make sure all required documentation is maintained in the grant file.
Views of Responsible Officials
Fremont Count School District #1 will modify its template contract used for these types of transactions to include a certification of compliance related to suspension and debarment from the person or entity, so that each contract entered into in the future will be compliant. See Corrective Action Plan.