Finding Text
Finding 2022-004: Procurement, Suspension and Debarment Identification of the federal program: Equitable Sharing Program, ALN 16.922 Criteria: Compliance Requirement I, Procurement, Suspension and Debarment, Part 4 of the 2022 Compliance Supplement states that, ?Although 2 CFR section 200.317-200.327 are not applicable, the Guide, Section VI.A.., requires agencies to follow their own jurisdiction?s procurement policies? and that Suspension and Debarment ? 2 CFR section 180.200-225 is applicable. In addition, the 2022 Compliance Supplement states that ?program policy and procedures are set forth in the Guide to Equitable Sharing for State, Local, and Tribal Law Enforcement Agencies (Guide) (July 2018) as well as Equitable Sharing Wires (Wires). The September 30, 2021 edition of the Wire (used to update the Guide) states that, ??local law enforcement agencies participating in the Department of Justice and Department of Treasury Equitable Sharing Program must verify that vendors are registered in the System for Award Management (SAM) and are in good standing. A vendor in good standing means the vendor is not suspended or debarred from receiving federal funds. This requirement applies to all qualifying purchases. A qualifying purchase is one single payment or multiple payments to a vendor that exceeds $25,000 annually.? Condition: Condition 1: The County purchased office furniture and equipment from a vendor totaling $64,518. Under the County?s purchasing policy, competitive bids were required; however, competitive bid documents were not present in the county?s paid bills files and there was no other documentation of competitive bids being solicited or received, or justification for not receiving bids, which the policy requires to be documented if bids cannot be obtained. Condition 2: The purchase noted in Condition 1, plus an additional purchase of $34,702 from another vendor were above the $25,000 threshold for vendor verification in the SAM system. Neither vendor was verified by the County to be registered and in good standing in the SAM system. Cause: Condition 1: There was an inadvertent disregard of the bidding requirement by the department head for the $64,518 purchase of office equipment, since the purchase was from a regularly used county vendor who offers government discounts. When the disbursement was processed by the County Clerk, there was a failure to recognize there was a bidding requirement prior to the purchase and a failure of the internal control in disbursement processing which identifies purchase subject to county bid requirements and determines if bid documents are present in supporting documents. Condition 2: There were no policy, procedures or internal controls in place for this requirement, as county personnel were not aware of the requirement. The County Attorney has also been unable to establish an account with SAM, even after engaging a consultant to assist, as the system will not allow multiple log ins for the same entity. Effect of Potential Effect: Denial or extinguishment of sharing requests; temporary or permanent exclusion from the Program; freeze on receipt and/or expenditure of shared funds; return of funds or offsets from future sharing. Questioned Costs: The questioned costs for Condition 1 were $64,518, the amount of the transaction noted in Condition 1. The vendors for these two transactions were determined by the auditor to be vendors in good standing in the SAM system; therefore, Condition 2 does not result in additional questioned costs. Context: There were no other transactions in the population of 2022 expenditures in the major program meeting the county?s bidding threshold requirement or the SAM vendor verification threshold for this program. Recommendation: Condition 1: All department heads should follow the existing procurement policy of the county with respect to bidding. The existing review of documentation by the Clerk?s department to ensure compliance with county bidding requirements should always be properly performed and any exceptions to it referred to the governing body, if necessary, prior to processing of disbursement. Condition 2: A policy and procedure should be developed to ensure compliance with the requirement to verify qualifying status of vendors with annual transactions of $25,000 or more. If department heads are unable to access the SAM system to verify vendor qualification, there should be a request forwarded to the County Clerk to do the verification prior to order of goods or services. Views of responsible officials: The Clerk and the County Attorney concur.