Finding Text
2023-001 – Procurement, Suspension, and Debarment
Finding Type. Immaterial Noncompliance/Significant Deficiency in Internal Control over Compliance (Procurement, Suspension, and Debarment)
Program. Formula Grants for Rural Areas; U.S. Department of Transportation; Passed through Michigan Department of Transportation; Assistance Listing Number 20.509; All Award Numbers.
Criteria. Recipients of federal awards are required to follow their own internal purchasing policies, as well as complying with purchasing standards set forth in the Uniform Guidance. Part of that guidance requires an entity to retain procurement bidding documentation and to check if a vendor is suspended or debarred before entering into a contract.
Condition. The Transit was unable to provide documentation to support its consideration of suspension and debarment requirements for all the vendors selected for testing. It also could not locate procurement bidding documentation for four of the vendors selected.
Cause. Management has indicated that the Transit is conducting proper procurement processes and checking for suspension and debarment but does not have the proper internal controls in place to ensure that documentation of the verification is retained in accordance with federal requirements.
Effect. The Transit is exposed to an increased risk that future noncompliance could occur and not be prevented or detected by the Transit's internal controls.
Questioned Costs. No costs were required to be questioned as a result of this finding inasmuch as our testing did not reveal any unallowed costs, and the vendors in question were not actually suspended or debarred.
Recommendation. We recommend that the Transit retain a printout of the client search that is completed on sam.gov to determine if a particular vendor has any active exclusions from participating in federal award programs in the vendor files. We further recommend that the Transit implement necessary internal controls to ensure that all procurement bidding documentation is retained in the vendor files to support its compliance with the requirements of the Uniform Guidance.
View of Responsible Officials. The Transit will implement the necessary internal controls to ensure the policy for compliance is followed and documented.