Finding 587110 (2023-002)

Listing Number, Federal Agency, and Program Name - ALN 21 .027, Department of the Treasury, Coronavirus State and Local Fiscal Recovery Fund Federal Award Identification Number and Year - SLFRP2024-2001 Pass-through Entity - Not applicable Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-002 Criteria - The City should ensure there is a process in place, prior to entering contracts with subrecipients, to verify that such subrecipients are not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300. Condition - We noted during testing that the City had unintentionally omitted a subrecipient from its search to ensure that the subrecipient was not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - From July 1, 2022 through June 30, 2023, any subrecipient with which the City entered into a contract using federal award funds should have been verified as not being suspended, debarred, or otherwise excluded pursuant to 2 CFR Sections 200.212, 200.318(h), and 180.300 and 48 CFR Section 52.209-6. We selected three subrecipients for testing, and one lacked any verification. However, based on our testing, we noted that the one subrecipient was not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300, thereby creating no questioned costs. Cause and Effect - The City is required to verify that any subrecipient with which it plans to enter into a contract using federal award funds is not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300. The City did not complete this requirement due to timing of final approval of the subrecipient pass-through funds. Recommendation - We recommend that an additional internal control be put in place to ensure the dual verification of subrecipients occurs. Views of Responsible Officials and Corrective Action Plan - Procedures have already been put into place to ensure that each new contractor is not on the federal list of suspended and/or debarred contractors. Furthermore, all vendors previously paid have been searched for in the federal list, and none were suspended and/or debarred.