Finding Text
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds
Federal Award Identification Number and Year - Not applicable
Pass-through Entity - Not applicable
Finding Type - Material weakness and material noncompliance with laws and regulations
Repeat Finding - No
Criteria - 2 CFR 200.214 requires non-federal entities to comply with regulations related to suspension and debarment.
Condition - The City had no control procedures in place for ensuring contractors performing work on federal projects were not suspended or debarred.
Questioned Costs - None. Although there was no verification that the contractor was not suspended or debarred prior to the audit, a subsequent check was performed to verify the vendor was not suspended or debarred.
Identification of How Questioned Costs Were Computed - Not applicable
Context - The City utilized one contractor for the civic center improvement project paid with Coronavirus State and Local Fiscal Recovery Funds.
Cause and Effect - Without controls in place to ensure vendors are not suspended or debarred, the City risks entering into contracts with excluded parties, which would be considered noncompliance with the Uniform Guidance.
Recommendation - We recommend the City update its policies to include controls for verifying contractors are not suspended or debarred. Although this is a requirement only for contracts involving the use of federal funds, the City may want to update its policies over all procurements, not just those related to federally funded projects.
Views of Responsible Officials and Corrective Action Plan - City manager office staff has searched the state procurement office webpage to check if any vendor for a federal project is on the debarment list, which they are not.
In the future, as part of Federal Grant Funding implementation, staff will check vendors to make sure they are not debarred or suspended from federal funding awards.