Finding 963788 (2023-001)

Findings And Questioned Costs For Federal Awards Reference Number: 2023-001 Prior year Finding: No Federal Agency: U.S. Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Significant Deficiency in Internal control, Noncompliance Criteria: Compliance - Per 2 CFR section 200.318, when procuring property, the non- Federal entity must have and use documented procurement procedures, consistent with States, for the acquisition of property or services required under a Federal award or subaward. Compliance - Per 2 CFR 200.214, restricts 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. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person (c) Adding a clause or condition to the covered transaction with that person. Control - Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Town was unable to provide documentation to support compliance with the required State procurement processes for acquiring property or services. In addition, the Town did not provide support that the suspension and debarment status of the vendor was checked before the contract was awarded. Context: For all contracts selected for testing, no support was provided for how the contract was procured. Further, the suspension and debarment status of the vendor was not documented for that contract. Questioned Costs: Undetermined. Cause: The Town’s internal controls were not sufficient to ensure that applicable procurement policies and Federal suspension and debarment regulations were followed for purchased made for the program. Effect: The Town is not compliant with federal and state procurement and suspension and debarment requirements. Failure to adhere to procurement and suspension and debarment policies and procedures may result in obtaining goods and services under terms that are not in the best interest of the Federal program. Recommendation: The Town should review and enhance controls and procedures to ensure that it follows the applicable procurement policy and Federal suspension and debarment regulations for all goods and services charged to the program. Views of responsible officials: We agree with the auditor’s recommendation. The Town of Camden, Delaware will review the State’s procurement process to satisfy the compliance requirements for the program. The Town of Camden, Delaware will also put procedures in place to check and review each bidder as part of the Federal suspension and debarment policies.