Finding Text
U.S. Department of the Treasury
Federal Financial Assistance Listing 21.027
COVID‐19 – Coronavirus State and Local Fiscal Recovery Funds
Procurement, Suspension, and Debarment
Material Weakness in Internal Control over Compliance
Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200.
Condition: We noted that while the City does have a purchasing policy, elements as required by Uniform Guidance are absent from the policy. In addition, elements that are required to be included in contracts with vendors who are paid using federal monies were missing from the contracts.
Cause: The City had not had single audits performed until recently as a result of the increase in funding due to the COVID‐19 pandemic. Because of this, they had not updated their purchasing policy to be compliance with Uniform Guidance.
Effect: While our testing noted no instances of noncompliance, the absence of internal controls over compliance as it relates to having a Uniform Guidance compliant policy, could lead the City to enter into covered transactions that are not compliant with federal regulations.
Questioned Costs: None reported.
Context/Sampling: Sampling was not used to test the policy.
Repeat Finding from Prior Year(s): No
Recommendation: The City should review the applicable provisions of the CFR to ensure their written procurement policy is compliant with Uniform Guidance requirements.
Views of Responsible Officials: Management agrees with the finding.