Finding Text
Finding 2022-003: Procurement & Suspension and Debarment Material weakness in internal control over Procurement & Suspension and Debarment and Noncompliance U.S. Department of Treasury; Coronavirus State Local Fiscal Recovery Funds (SLFRF) passed through Fresno County. AL No. 21.027. Questioned Cost: Not applicable How the Questioned Cost was Computed: Not applicable Condition: C&M identified that the FCFPD did not have adequate written policies and did not maintain a written code of standard selection procedures for procurement transactions that included all the requirements of the Uniform Guidance. C&M identified a lack of adequate knowledge and experience of key procurement managers in light of responsibilities for procurements for Federal awards. In addition, the costs charged to the program included fuel cost incurred by FCFPD. The fuel cost had been procured from a couple vendors. The FCFPD stated the selection of these vendors was based on past experience and was not able to provide C&M with support of a noncompetitive procurement process that complies with 2 CFR 200 standards. Also, there was no evidence that FCFPD verified that vendors were not suspended or debarred or otherwise excluded from participating in the transactions before entering into the transaction with them. Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR Part 200, section 318(i) (Uniform Guidance) states that the non-Federal entity must maintain records sufficient to detail the history of procurement. The records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contractor type, contractor selection or rejection, and the basis for the contract price. In addition, the Uniform Guidance, 2 CFR Part 200, section 200.118 states that the non-Federal entity must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 and must use their own documented procurement procedures that must conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Cause: The FCFPD?s procurement policy is limited to establishing a guideline on spending and purchasing authority limits. There was a lack of understanding of federal laws and regulations relating to this requirement. Management did not have an understanding of the requirements for procurement and suspension and debarment. Effect: Procurements were made following a noncompetitive process that were not adequately documented and FCFPD could enter into transactions with vendors that are suspended of debarred. Costs charged to the Program could be disallowed. Recommendation: C&M recommends the FCFPD establish written procurement policies and procedures as required by the Uniform Guidance. The FCFPD should consider implementation of the following internal controls: 1. Review the Uniform Guidance and update the current policies and procedures to include all the requirements not part of the FCFPD?s current policies. 2. Make available the updated policies and procedures to responsible management and employees. 3. Management should monitor compliance and performance with the policies and procedures. View of Responsible Officials: Management agrees with the finding and has provided the accompanying corrective action plan.