Finding 627857 (2022-002)

Department of Treasury, Passed Through the South Dakota Department of Agriculture and Natural Resources, FFAL Number 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension, Debarment Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria: A good system of internal controls requires that a review of contracts to ensure all required contract provisions required under 2 CFR 200 Subpart D Appendix II - Contract Provisions for Non-Federal Entity Contracts Under Federal Awards are included. Condition: The City did not include all required contract provisions in a Construction Manager at Risk contract. Cause: The City does not have an internal control system designed to identify missing contract provisions. Effect: The results in the City potentially failing to detect or prevent four missing contract provisions out of the ten required. Questioned Costs: None reported. Context/Sampling: One instance of noncompliance out two contracts tested. Population of two contracts. Repeat Finding from Prior Year(s): Yes, 2021-003. Recommendation: It is the responsibility management and those charged with governance to develop a system of internal control that will ensure all required contract provisions are included in all contracts. Views of Responsible Officials: There is no disagreement with the audit finding.