Finding Text
The Christian County Fiscal Court Did Not Have Adequate Controls Over The Procurement, Suspension and Debarment Compliance Requirement On Federal Expenditures
Federal Program: Assistance Listing #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds
Award Number and Year: Information not available
Name of Federal Agency and Pass-Thru Agency (if applicable): U.S. Department of Treasury
Compliance Requirements: Procurement, Suspension & Debarment
Type of Finding: Material Weakness
Amount of Questioned Costs: $0
Opinion Modification (if applicable): No
COVID Related: Yes
The Christian County Fiscal Court failed to implement adequate controls over Procurement, Suspension and Debarment compliance requirements of the Coronavirus State and Local Fiscal Recovery Funds (SLFRF). The disbursement of the SLFRF monies was not handled in the manner prescribed by the county’s administrative code. Three disbursements totaling $1,378,654 were tested and purchase orders were not utilized for any of the three disbursements.
The fiscal court also failed to document adequate controls concerning the compliance with suspension and debarment requirements. There was no documentation that suspension and debarment compliance requirements were followed. The county’s contracts with local utilities failed to include suspension and debarment requirements. Additionally, there was no documentation that a search for suspended or debarred parties was performed prior to disbursing the funds to the utilities.
The county treasurer was not aware purchase orders were not issued. Preprinted purchase orders for the ARPA (SLFRF) Fund were not available for use. There was a breakdown in the verification process of debarred or suspended parties. Since the fiscal court did not issue purchase orders for the disbursements from the SLFRF monies, amounts spent could have exceeded budgetary restrictions, rendering them void. Additionally, because there was no documented search for suspended or debarred parties, ineligible vendors or contractors could have been utilized putting the county at risk for being held responsible for unallowed or questioned costs.
2 CFR 200.318(a) states “The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward.”
The Christian County Administrative Code section 4.5 states for claims against Christian County “Each claim shall be recorded by date, receipts, and purchase order number and presented to the Fiscal Court at its next meeting.” Additionally, the Department of Local Government (DLG) requires counties to implement a purchase order system which includes issuing purchase orders for all claims expended from the county’s budget. Good internal controls require the use of established procurement policies to ensure that federal disbursements are handled in the manner consistent with the treatment of non-federal disbursements.
2 CFR 200.214 states “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” Good internal controls dictate documentation be maintained that verifies debarment and suspension regulations have been communicated and followed for vendors or contractors used in federally funded projects. We recommend that the county improve internal controls over federal expenditures to ensure all compliance requirements are followed.
This is not a repeat finding from the previous year.