Finding 960469 (2023-002)

2023-02 – Procurement, Suspension and Debarment Finding Type. Material Noncompliance; Material Weakness in Internal Controls over Compliance. Program. COVID-19 - State and Local Fiscal Recovery Funds (CSLFRF); U.S. Department of Treasury; Assistance Listing Number 21.027 Criteria. Recipients of federal awards are required to ensure that federal procurement standards are followed for any purchases over the federal micropurchase threshold. 2 CFR 200.320 requires that these purchases must adhere to one of the allowable procurement methods (sealed bids, competitive proposals, noncompetitive procurement) and maintain documentation of this procurement decision. Condition. For the one vendor tested that had expenditures of $2,256,725, the County was unable to provide documentation to support that competitive bidding was performed in accordance with the County's policies and procedures. Cause. This condition was caused by management oversight. Effect. As a result of this condition, the procurement requirements as outlined within the County's policy were not followed. Questioned Costs. The total charges included in our sample that were not supported by appropriate documentation amounted to $2,256,725. Recommendation. We recommend that the County follow their policies and retain documentation to support those policies are abided by. View of Responsible Officials. Management recognizes and agrees with the recommendations of the auditors. The costs were allowable under the CSLFRF with respect to the eligible use of funds. The County has a "Policies and Procedures of Federal Awards Administration" outlining the requirement for purchases made with federal funds. The County had an existing project development agreement with a vendor to conduct a preliminary evaluation of the County's facilities and energy costs. It is management's view the County should have provided the sole source justification form for use of the vendor for implementation of the project with the reason indicated as it was currently under contract through a November 17, 2021, Resolution (#21-11-119 to Approve Energy and Infrastructure Project Development Agreement) rather than rely upon the resolution as the basis for the sole source non-competitive proposals. Management intends to follow the existing policy in its entirety, but will recommend changes to procedures to ensure compliance with purchasing policies. These changes to procedures will be recommended on the basis that simplification of the process is important since the use of sole sourcing of vendors is intended to occur on an infrequent basis. Responsible Official. Connie Sobie, Controller/Administrator Estimated Completion Date. September 30, 2024.